The government has directed dealers and retailers of construction materials to not raise price of construction materials, citing shortage.
Urging traders not to raise prices in an arbitrary manner, Ministry of Industry (MoI) has requested manufacturers to up production of construction materials like cement, steels, rod, aggregate and bricks, among others.
The demand for construction materials is expected to go up significantly once people start rebuilding their homes and other buildings damaged by the earthquake.
According to Nepal Police, the earthquake of April 25 has destroyed around 300,000 houses and hundreds of cultural monuments in many parts of the country.
“Demand of construction materials is certain to go up when reconstruction of damaged houses and cultural heritage sites begin,” Minister for Industry Mahesh Basnet said. “The government will take appropriate action as per the existing laws if any traders is found increasing price of construction materials in the pretext of shortage.”
However, traders say price of construction materials will increase significantly and that the market will see shortage of key construction materials. “Majority of brick kilns in quake-affected areas have been damaged. This will affect production,” Mahendra Bahadur Chitrakar, president of Federation of Nepal Brick Industries, told Republica, adding, “Brick kilns have not raise price so far.”
According to Chitrakar, around 105 of the 112 brick kilns in Kathmandu Valley have suffered physical damage in the earthquake. “If these kilns fail to produce bricks as per their capacity, the market will see shortage of bricks. It might lead to black-marketing as unscrupulous traders would try to make some fast bucks,” he added.
Dhurba Kumar Thapa, president of Nepal Steel Rolling Mills Association, said local steel rolling mills can meet the demand if they operate as per their installed capacity. “There are 16 steel rolling mills in the country. Some of them, however, have halted production after the earthquake,” Thapa said, adding, “If all these mills produce as per their installed capacity, we can meet the demand and put the price under control.”
According to Thapa, domestic steel mills are producing 300,000 tons of steel on a daily basis at present. Their installed capacity is 600,000 tons per day.
Jay Ram Lamichhane, chairman of Federation of Contractors Association of Nepal (FCAN), said construction cost is likely to increase by 20 percent. “As the demand for construction materials will soar drastically once reconstruction works begin, production of local manufacturers unlikely to meet the demand,” he said, urging the government to ease import of construction materials from India and other countries.