Monday, 29 November, 2021

Construction sector hit hard with price hike of construction materials


By Laxman Kafle
Kathmandu, Dec. 6: Prices of construction materials, especially iron, steel, sand and pebbles, have gone up significantly following the recent momentum in construction works.
The price of iron and steel has increased by Rs. 20 per kilogram in the market within two months, said Rabi Singh, president of the Federation of Contractors' Association of Nepal (FCAN).
The market price of per kilogram of iron bar stands at Rs. 80 at present which was Rs. 62 per kilogram about two months ago.
"The suppliers have increased the price of iron rods artificially when the construction works gained momentum in the country. The price was hiked after increase in demand of iron in the market," he said.
Similarly, the price of riverine construction materials - sand and pebble stone - also increased by up to 60 per cent in two months, he said.
Singh said that sand suppliers were now supplying a truck of sand at Rs. 35,000. They used to supply a truck of sand at Rs. 24,000 two months ago. The price of pebbles has also increased to Rs. 35,000 per tipper from Rs. 22,000.
He, however, said that the price of cement had not increased during the period.
Contractors have been hit hard by the rise in prices of construction materials by suppliers taking advantage of the construction season amid the COVID-19 pandemic, he told The Rising Nepal.
He drew serious attention to the excessive price hike of construction materials through cartel.
"Iron-based manufacturing companies have increased the price of iron bar by more than the ratio at which the price of iron blades has increased," he said.
He said that the current price rise was not practical and scientific from any point of view.
Similarly, the FCAN has also expressed dissatisfaction over the recent decision of the Ministry of Home Affairs not to excavate and sell river-related materials from any part of the country.
The federation has drawn the attention of all the concerned bodies to the situation that the projects may come to a standstill due to the extreme shortage of stone, pebbles and sand in the under construction projects due to the decision of the government.
Due to excessive price hike and black marketing, small construction businessmen are facing more problems in lack of price adjustment for construction projects lasting less than a year.
Singh urged to immediately stop the black marketing, which has been overwhelming the construction season amidst adverse conditions.
Pradeep Kumar Shrestha, managing director of Panchakanya Group, accepted the hikes in the price of iron lately in the market.
He said that the price of iron had already increased by around 12-14 per cent in the market due to increase in the price of raw materials in the international market and growing demand in the local market as well.
He claimed that there was no cartel by the suppliers as its price fluctuated based on the price of import raw materials as well as market demand and supply.
He said that the price of iron had increased in India itself lately due to growing demand following the revival of construction works affected by COVID-19.
Shrestha predicted that price of iron would increase further in the local market as the price of iron was growing day by day in the international market.
The daily demand for iron stands at 3,000-4,000 tonnes in the local market which shows that the construction work is gaining momentum.
Bharat Ghimire, president of Kavre Mines and Crusher Association, said that price of river-related materials, including sand and pebbles, increased by Rs. 4,000-Rs. 5,000 per tipper in the market after the government directed to close the crusher industries across the country.
Market is facing the shortage of materials after the closure of excavation encouraging suppliers in black marketing, he said.
Almost all crusher industries operating in Kavrepalanchok are closed after the decision of the government, but some industries might be operating illegally in Kavre and other districts, he said.
“Present price hike of sand and pebble is unnatural. Consumers have been compelled to buy sand and pebble paying higher prices to complete their ongoing houses and projects,” he said.