Over 30,000 Projects Stalled Due to Lack of Funding Guarantee: FCAN

More than 30,000 development projects approved by the government have stalled due to the absence of ‘funding guarantees’, with contractors accusing the state of adopting impractical policies that are crippling the construction industry.

With over 2.5 million jobs tied to the sector, the Federation of Contractors' Associations of Nepal (FCAN) has urged the government to introduce urgent, industry-friendly policy reforms.

Speaking at a press conference in Kathmandu on Monday, FCAN said that since fiscal year 2016/17, the government has approved projects worth approximately Rs 1,900 billion, but more than 30,000 of them remain stalled.

The Federation noted that the annual capital expenditure execution rate remains alarmingly low. Furthermore, several high-profile projects of national pride, including the Melamchi Water Supply Project, the Nagdhunga Tunnel, and the Kathmandu-Tarai Fast Track, which involve foreign construction companies and were backed by assured funding, have also faced significant delays. FCAN concluded that impractical laws and regulations dating back nearly two decades continue to hinder the growth of the construction industry.

FCAN General Secretary Roshan Dahal emphasized the need to identify the real causes of delays in the construction sector and seek appropriate solutions. He also urged political leaders and government officials to exercise patience and restraint in their statements regarding construction works.

The Federation has put forward a series of demands to revive the sector, which includes amending Clause 59 of the Public Procurement Act, 2063 BS; implementing a provision for the automatic rejection of bids that are more than 15 percent above or below the estimated cost; simplifying the monthly payment process; formulating an umbrella act for the construction industry; ensuring the smooth supply of construction materials; reducing the threshold for construction work to be handled by consumer committees; enhancing construction-related expertise within regulatory bodies; and guaranteeing the safety of construction entrepreneurs and their equipment.

Highlighting the industry's importance, FCAN stated that the construction sector is the second-largest source of employment in Nepal after agriculture, providing jobs to over 2.5 million people. It stressed the need for industry-friendly policies and the adoption of advanced technology to accelerate infrastructure development. -- With inputs from RSS