The Federation of Contractors’ Associations of Nepal (FCAN) has demanded that the government and the Nepal Rastra Bank (NRB) coordinate to make arrangements for payment to construction companies. Speaking at the 15th general assembly of the Society of Economic Journalists in Kathmandu on Saturday, FCAN President Ravi Singh warned that more than 90 percent of construction entrepreneurs will go bankrupt after mid-December. While demanding that the government solve the problem by coordinating with the NRB, Singh said that the problems of construction entrepreneurs will not be solved by extending the deadline alone. He further alleged that the government had not been able to make the country's construction sector and industry dynamic. FCAN told Finance Minister Bishnu Prasad Paudel that they cannot move the construction sector forward as they are not able to do more business due to non-payment of installments. The government must heed the warning of FCAN and take the necessary initiative to make the country's economy smooth and dynamic by settling the dues owed to the construction sector.
While the construction entrepreneurs have been demanding that the government settle their dues, the government has been making promises one after another. Addressing a program in the capital a week ago, Finance Minister Paudel pledged to release the dues of contractors immediately. Earlier too, the government had repeatedly promised to clear the dues of the contractors, which appears to have not been cleared till date. According to the contractors, the government has paid only Rs 15 billion out of the total dues of Rs 45 billion. Although the government had promised the contractors to settle their payments by mid-October this year, it is yet to fulfill the promise. This has left a number of contractors at risk of being blacklisted as they are unable to pay bank loans and interest. The contractors argue that they have been suffering from the rising cost of construction materials while the government has been dilly-dallying the payment. The Finance Ministry has maintained that the payments facing a mismatch between contractors’ claims and the government’s evaluation are the only ones not released. If this is really the case, the government must initiate the verification process and expedite the payment.
In Photos: Construction entrepreneurs stage protest against gov...
In particular, construction entrepreneurs are worried that their failure to settle the dues within the given deadline could put them on the blacklist, apart from incurring huge losses to their businesses. As the government has failed to make as much capital expenditure to give momentum to the economy, the expeditious release of the due amount could give fresh momentum to the national economy. A construction boom can significantly impact the national economy by creating jobs and driving economic growth. This can boost employment across various skill levels, raise GDP through increased demand for raw materials and services, and stimulate the manufacturing and transportation sectors. As the government’s revenue collection is also witnessing a decline, the boom in the construction sector will equally benefit the government through increased tax revenues. Keeping in view the multiple benefits the construction boom can have on the national economy, the government must expedite the release of the dues it owes to the construction entrepreneurs without any delay.
