The Department of Supplies Management (DoSM) has started aggressive market inspections on suspicion of artificial price hike of construction materials such as cement and steel rod. On Tuesday, the DoSM cross-checked 10 trucks at the Prithvi Highway. The trucks were transporting construction materials to the Kathmandu Valley.

Prem Lal Maharjan, president of Nepal Consumers’ Forum, who took part in the market inspection on Tuesday, said the department confiscated the invoices and other related documents from 10 trucks transporting cement to the Capital. “After cross-checking the invoices, we observed wide price variations at different locations,” said Maharjan.

Cement prices have recently increased by upto Rs120 per sack and now costs Rs910 compared to Rs790 earlier. Similarly, the price of steel rod has also increased by Rs10 per kg.

The department has been conducting market inspection of the construction materials for the past few days mainly in the Tarai region. “Based on the study that we conducted in Tarai, traders are being suspected of artificially inflating the prices of cement and steel rod,” said DoSM Director General Kumar Prasad Dahal.

 Dahal revealed that the department sought clarification from Cement Manufacturers’ Association and Nepal Steel Rolling Mills Association for actual reasons behind the excessive rise in the price of the construction materials. “The department had given them a three day deadline to present and provide clarification. However, they turned down the department notice,” said Dahal adding that following the denial from the concerned traders, the department had started a study on prices of the construction materials and started aggressive market monitoring.  The manufacturers of the construction materials however said that they were compelled to raise the price due to the soaring costs of raw materials, energy and  transportation. “With these reasons, the factory cost has gone up by Rs40 per sack,” Dhurba Thapa, president of the Cement Manufacturers’ Association, said.

According to Thapa, the price of cement clinker has increased by IRs1,000 in India. “In addition, the shortage of clinker due to Indian Railway refusing to ferry cement clinker in the last 15 days has exacerbated the problem, resulting in higher cost of the raw material,” he said.

Raising the issue of air pollution, Raxaul residents had protested against the loading of Nepal bound cement clinker at the traditional location in Raxaul, India. The dilemma on settling an alternative location to stock the imported cement clinker had disrupted the supply of raw material.

 Thapa said that they had urged the government to resolve the issue as soon as possible. There are more than 50 cement factories operating in the country. Out of the 17 factories that use clinker imported from India, 13 are located in Birgunj, as per the association.

Likewise, the price of steel rod has also skyrocketed recently, which has also blamed the increased price of the raw material abroad. “The price of steel has increased by up to $100 per tonne in the international market,” said an official at Pachakanya Steel, a subsidiary of Panchakanya Group, under condition of anonymity. “As a result, the price has increased to Rs90 from Rs81 per kg,” the source said.