Building materials dearer on higher freight rates

- Madhav Dhungana, BHAIRAHAWA

Jan 2, 2018-

Prices of construction materials have surged with raw materials becoming dearer due to the introduction of non-tariff barriers and higher freight rates for the transportation of river materials such as sand.

OPC cement has become costlier by 9.2 to 10.6 percent while the price of steel bars has jumped 11 percent since the elections of November 26. During the same period, the price of sand per tractor has jumped 60 percent while the freight rate per truck has increased by 30 percent.

Two weeks ago, the price of a 50-kg sack of OPC cement stood at around Rs760 in the vicinity of Bhairahawa. The price has now shot up to Rs830 to Rs840 per sack. Prices of cement in Rupandehi, Kapilvastu and Nawalparasi districts have also gone up to around Rs730 per 50-kg sack from Rs660. 

During the same period, prices of steel bars went up to Rs80 per kg from Rs72 and the price of sand increased from Rs2,500 per tractor to around Rs4,000 per tractor. One of the reasons for the hike in prices of construction materials is a jump in transportation costs. Truck syndicates have raised freight rates for the transportation of construction materials to Rs2,600 per truckload from Rs2,000 in the past. 

The major materials used in construction are cement, steel bars, bricks, sand and stones. Although supply of most construction materials is normal in the country at the moment, the construction sector may face a shortage of cement in the coming days due to disruptions in the movement of clinker and fly ash.

Shipments of clinker and fly ash have been affected since locals of Raxaul in India prevented the transportation of these dusty cargoes through their locality. Residents have resorted to this measure stating that the loading and unloading of clinker and fly ash, two key raw materials used in cement production, was polluting the environment and created health hazards. 

Many cement manufacturers are using the disruption in the movement of clinker and fly ash as a pretext to raise cement prices.

Many, however, say that the disruption in the movement of clinker and fly ash through Raxaul should not affect cement prices in Bhairahawa as the raw materials are entering Nepal from other border points. 

“Manufacturers have raised prices by creating an artificial scarcity,” said Sunil Marasini, district president of the Siddhartha Construction Entrepreneurs Association. 

The price hike cannot be justified because the exchange rate of the dollar vis-a-vis the Nepali rupee has remained stable, prices of clinker have not gone up in India, load-shedding hours have gone down significantly and prices of petroleum products have not risen, according to Marasini. 

“We ask the government to take stringent steps to control price hikes,” he said.

Officiating Chief District Officer of Rupandehi Shambhu Prasad Regmi said that the 

market was being monitored to address complaints from consumers. 

Published: 02-01-2018 08:34

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