Kathmandu, April 28: Construction entrepreneurs across Nepal have demanded immediate price adjustments in line with rising material and fuel costs, warning that the sector is nearing collapse.
The Federation of Contractors’ Associations of Nepal (FCAN), Bagmati Province, has urged the government to intervene, citing sharp price hikes and supply shortages of key construction materials. Speaking at a press conference in Hetauda, Bagmati President Chhatra Bahadur Tamang described the surge in fuel prices as a “tsunami” hitting the infrastructure sector.
He said ongoing conflicts in the Middle East have driven repeated increases in diesel, petrol, and kerosene prices, while essential materials such as bitumen, cement, and steel rods have also seen abnormal price rises and supply constraints. As a result, many projects are on the verge of a standstill, making deadline extensions unavoidable.
Despite repeated appeals, Tamang criticised the government for offering only verbal assurances without concrete action, leaving contractors, workers, and related industries under severe financial strain.
Contractors also argue that the current price adjustment mechanism—based on the Nepal Rastra Bank index—fails to reflect actual market prices, further worsening the crisis. They have called for the immediate implementation of “Price Adjustment Directive-2” and revision of all contracts accordingly.
FCAN Senior Vice-President Rajkumar Budhathoki warned that rising costs during the peak construction season have halted work on both national pride and other major projects nationwide.
Similar concerns have been raised in Koshi Province, where contractors say fuel and material prices have surged by up to 100%, making it impossible to complete projects within agreed timelines. They have demanded deadline extensions, along with revisions to contract terms, including bank guarantees and insurance periods.
Contractors in Koshi also reported that several projects, including road blacktopping works, have stalled due to shortages of fuel and materials.
The federation has urged the government to act swiftly to stabilise the sector and prevent further economic fallout. #Nepal #contracting
