Sand, aggregate prices fall on slow demand, improved supplies

Published On: January 8, 2019 08:56 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 8: Average price of sand and aggregate has dwindled by at least 30 percent in the Kathmandu Valley owing to low demand.

There has been a drop in the demand due to near completion of the reconstruction of private houses and completion Koteshwar-Kalanki road expansion work in Kathmandu Valley and also shut down of Melamchi Water Supply Project, among others, according to suppliers and crusher plant operators.
The factory price of a tipper load (265 cubic foot) of sand, aggregate and chip has dropped to Rs 4000, Rs 10,000 and Rs 5,000 from Rs 8,000, Rs 14,000 and Rs 10,000 over the past month.

“Consumer price of sand, aggregate, and chips in Kathmandu Valley currently stands at Rs 25,000, Rs 21,000 and Rs 22,000, respectively, down from Rs 31,000, Rs 25,000 and Rs 26,000 of the past month,” Kiran Thapa, promoter of Melamchi-based Jalpa Infrastructure Pvt Ltd, said.

One of the reasons behind fall in the prices of these construction materials is increased supply.  Locals units that were formed in 2017 are focusing on increasing revenue by permitting contractors unhindered excavation, Thapa said, adding that most of the local units have doubled their revenue targets compared to 2017.

Prices of construction materials vary from place to place depending upon the quality and the distance of crusher plants from consumption centers. 

Umesh Sherchan, president of the Federation of Crusher Industry Entrepreneurs, also said that the price of sand and aggregates has come down due to fall in demand. 

During winter last year, crusher plants had increased price of construction inputs as reconstruction of private houses was at the peak. The price had remained more or less the same till mid-November, according to crusher plant operators.

According to National Reconstruction Authority, nearly 45 percent of 742,135 housing grants recipients have already completed reconstruction work, 32 percent of such recipients are now busy building their houses.

Talking to Republica over phone, Shrikrishna Baidya, promoter of Kaldhunga Aggregates and Sand Private Limited based in Mangaltar of Kavre, said falling demand in the market has caused prices of construction materials like sand and materials to fall. “Prices could have fallen further had tippers been allowed to enter Kathmandu Valley round the clock like in the past,” he added.

Tippers had reduced transportation cost earlier in August after traffic police barred them to enter Kathmandu Valley between 8 am to 7 pm citing traffic congestion and increasing accidents involving tippers. They are yet to bring transportation cost down.

Ganesh Lal Shrestha, president of Nepal Tripper and Truck Entrepreneurs Committee, said they had to hike transportation cost as tippers could operate only one trip a day due to restriction to enter the Kathmandu Valley imposed by the traffic police. This had also increased the price of sand and aggregates, he added.

Krishna Prasad Panta, a supplier of sands and aggregates based in Dhading, said that the price of sand and aggregate has fallen but not to the extent of Melamchi among others. “Sand and aggregate of Dhading are of higher quality and produced from larger boulders. Therefore, our prices have not come down compared to other areas,” he said, adding that prices have fallen by only Rs 2,000 to Rs 4,000 per tipper.

But price of sand and aggregates supplied in mini trucks, however, are expensive. 

Tipper drivers say the prices of construction inputs could have fallen further if there were no hassles. “Police and local administration create hurdles in the pretext of overweight, route permits and other issues to make some fast bucks,” said a tipper driver who ferries sand and aggregates from Melamchi. “I paid Rs 4,000 per trip in bribes last week. This burden ultimately falls on consumers.”

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