Kathmandu. KATHMANDU: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has drawn the attention of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) to the fact that the construction industry, which is the backbone for the development of the country’s economic activities, is currently reeling under the worst crisis in history due to the unprecedented and exorbitant price hike in the prices of fuel and construction materials.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) expresses its full solidarity with the financial and mental pressure faced by the contractors in this difficult situation. The construction industry, which plays the most important role in reviving the economic activities of the country, has been providing employment to more than 20 lakh people directly and indirectly.

The construction industry, which spends around 80 per cent of the capital expenditure of the budget allocated by the government, has also collapsed due to the disruption in the supply chain due to the unexpected and exorbitant price hike in fuel and construction materials.

The price of diesel has increased from 139 per litre on February 9 to 225 per litre and bitumen from 75 to 155 per kg on February 9. During this period, the contractors have incurred a loss of more than Rs 10 billion. The Federation of Contractors’ Associations of Nepal (FCAN) has been repeatedly requesting the government to make arrangement of price adjustment in all types of contracts in the context of the construction industry being on the verge of coming to a standstill due to the increase in various construction materials including diesel, kerosene, bitumen, transportation cost and labor cost.

At a time when even the neighboring country India has been adjusting the price of construction materials including fuel in proportion to the price increase, the Nepali contractors have been deprived of price adjustment.

The Federation of Contractors’ Associations (FCAN) has written to the Government of Nepal to immediately issue guidelines or circulars for price adjustment as per the price increase in each project and to make arrangements for price adjustment in the case of contracts of all periods and to immediately adjust the price of all the contractors suffering from price increase and to save the construction industry from collapse.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged the government and stakeholders to make arrangements for price adjustment immediately to make the overall economy dynamic in view of the current situation where the contractors are under extreme financial and mental pressure as per the provision that the price of the contracts of all periods should be adjusted and the price adjustment should not be frozen as per the clause 55 of the Public Procurement Act-2063.