Kathmandu. The government has decided to implement a special price adjustment to address the abnormal price hike seen in the construction sector.

According to the Ministry of Infrastructure Development, the decision to make special price adjustment on construction materials has been made in accordance with Clause 55 (1A) of the Public Procurement Act, 2063.

According to the ministry, special price adjustment will be applicable on petroleum products, bitumen, HDPE pipes, cement and sticks. Public construction contracts that have a working period and are in operation after March 15, 2008 will be included in this provision.

The special price adjustment will be provided only on the basis of actual and proven consumption. For this, the actual consumption in the related construction work, the certified quantity and the price of the related materials will be taken into account.

Even contracts that do not have a provision for price adjustment and year-round contracts will come under the purview of special price adjustment if they meet the prescribed criteria. Similarly, in the case of contracts where there is a provision for price adjustment in the agreement, only the remaining eligible amount will be made available as special price adjustment by reducing the price adjustment amount as per the prevailing provisions and agreements.

The ministry has clarified that this provision is not meant to address normal market fluctuations but only to increase prices arising out of extraordinary circumstances. The ministry said that since the amount will be determined on the basis of actual consumption and certified quantity, there will be no double benefit or unnecessary payment for the same price increase.

The government has taken this decision as the abnormal increase in the price of construction materials due to the international situation may affect the cost and implementation of public construction projects.

According to the Ministry, the special price adjustment arrangement has been made with the objective of preventing the construction work from being affected or halted due to the extraordinary international situation, to give continuity to the ongoing development projects and to address the imbalance in the construction sector in a just manner.