KATHMANDU, May 4: It has been 10 days since the construction entrepreneurs stopped the work of development projects. The entrepreneurs have stopped the construction work with various demands due to the recent rise in the prices of construction materials. The strike has affected over 3,500 construction projects across the country.
In the meantime, talks between the government and entrepreneurs have not yielded any concrete results.
The time period from the month of mid-March to mid-July is considered the main season for construction projects as much of the project expenses are made at the time. However, the increase in prices of construction materials has led to a ‘construction holiday’ for the past 10 days.
As a result, the infrastructure sector has been left in jeopardy. Although 10 months have passed in the current fiscal year, capital expenditure has been only 29.59 percent. According to the Office of Auditor General, the government had set a target to spend Rs 374 billion in the current fiscal year. As of May 2, only 29.59 percent of the target or Rs 111 billion has been spent.
A negotiation committee formed by the government met with the association on Thursday to discuss the issues related to the revision of Public Procurement Rules, 2008 and technical guidance on price adjustment. Later, the Public Procurement Monitoring Office was given a mandate to hold talks with the entrepreneurs but the talks ended without any conclusion last Friday.
The construction entrepreneurs have started agitation demanding price adjustment as per the recent increase in construction materials and revision of Public Procurement Regulations, 2008 and price adjustment of construction materials as per the technical guidelines. Even though the construction businessmen announced postponement of the agitation program after last Friday's meeting, the construction work of the infrastructure has not started.
According to President of FCAN Rabi Singh, “"We had held talks with the Public Procurement Monitoring Office and conveyed our demands to them." Singh hoped that Wednesday's meeting would address the demands of entrepreneurs. "If the government meets the demands of the businessmen, we will move ahead with the construction work immediately," he said.
In the last 10 months, the price of an eight mm TMT rod has increased by more than Rs. 25 excluding VAT. Last July, the price of eight mm TMT rod was fixed at Rs 92 per kg excluding value added tax (VAT). Today, its price has reached Rs 117 per kg. Similarly, the prices of other raw materials including gravel, sand, and stones have also increased. The prices of petroleum products used in the construction sector and by-products of petroleum products including bitumen have also skyrocketed. The price of diesel was Rs 104 per liter last July but now it has gone up to Rs 143 per liter.