Revive Construction Sector

Across much of the world, including Nepal, construction industry is seen as a bellwether of a country's economy. One of the major drivers of economic growth, it signals where the economy is heading. Because the industry's ability to generate mass employment is almost unmatched, it's imperative that it be kept in good health. Yet ever since the COVID-19 hit, the industry has been in the doldrums, though many other industries, including tourism, have shown signs of recovery. These are a litany of factors ailing this sector. 

First, the quality of works. It's so common for a newly constructed road, supposedly built to last for years, to get peeled off in a few weeks or months after its construction is completed and handed over. Similarly, it no longer raises our eyebrows when we see freshly constructed building wearing cracks. In fact, the problem is so dire that there are glaring instances of billions of rupees worth of projects featuring the construction of bridge, irrigation canal, water supply project and many others that came crashing down only a few months into their inauguration. And most of the time faulty design that failed to take into account probable catastrophic events, use of substandard materials, and cutting corners to evade the mandated guidelines are blamed.  

Second, delay in disbursement of government fund. Many 'cash-starved' contractors have long complained that they had yet to receive the payment of the completed works because the government failed to release the fund in time. The government, for its part, cite many reasons for its reluctance to release the money, like substandard work, cost overrun, or non-compliance with the stated standards. Third, a contractor company running away, leaving the project in limbo. There are numerous still-incomplete bridges or buildings across the country even years after the contracted company fled, abandoning the project midway through. 

The tendency to bid a project at a rate lower than it would cost at the end of its course just to outbid the competitors is mainly responsible for this. That said, there are also a good number of well-reputed contractors with unblemished track record. The government mustn't let them down. The good news is that with enough political will these plaguing issues can be sorted out. What the government's unwavering focus should be on is achieving the development target. And without spending the earmarked budget, this goal will remain elusive. That the government only spent a tiny fraction of such budget is a serious problem repeating year after year. It could, for example, spend only 15.52 per cent of the total capital allocation for the current fiscal year so far. 

But in a positive move, it has decided to clear its dues with the payment of Rs. 8.1 billion to contractors, who are demanding that it also clear the remaining pending dues of Rs. 40 billion. Not only to reinvigorate the economy but also to help businesses stay afloat, it's crucial that the budgeted money floods the market. And construction sector can easily absorb that money. Many crumbling public infrastructures like bridges, roads, hospitals, etc. are in dire need of facelift, and the release of the money will work wonders to give them a new lease of life.