Construction entrepreneurs have warned they will suspend all construction activities if the sharp rise in cement and steel rod prices continues. The Federation of Contractors Associations of Nepal (FCAN), the umbrella body of construction entrepreneurs, says cement prices have risen by more than Rs 200 per bag and steel rods by Rs 15 per kilogram within the past month alone.
In a letter to its members, the federation instructed contractors to approach the concerned authorities to claim compensation for the increased costs on ongoing projects. Members have also been told to inform project stakeholders that construction work may be suspended if the price hikes are not addressed. FCAN has accused cement and steel rod manufacturers of forming a cartel to raise prices without valid reason.
FCAN construction halt warning follows broken price agreement
FCAN President Ravi Singh said the escalation is a significant obstacle to completing projects, noting that project budgets were fixed on the basis of older market rates. “We demand that rates be adjusted according to the current market prices. Without this adjustment, no projects can be completed. If the government fails to address the impact of this price hike, we will have no choice but to halt all construction work,” Singh said.
Singh recalled that an earlier agreement brokered at the Ministry of Industry, Commerce, and Supplies had set Ordinary Portland Cement (OPC) at Rs 700 per bag and Portland Pozzolana Cement (PPC) at Rs 600 per bag within the Kathmandu Valley. He claimed manufacturers have ignored the agreement, with OPC now at Rs 705 and PPC at Rs 680 per bag, and alleged that producers are deliberately cutting output to create artificial shortages.
Manufacturers reject the cartel charge
Nepal Cement Producers Association President Raghunandan Maru refuted the allegations, saying the price adjustment reflects market realities rather than an actual increase. “The price of cement is lower than last year. Due to reduced economic activity, the cement industry is incurring losses. Our priority is to ensure the viability of the industry rather than reducing prices,” Maru said, adding that further price reductions are not possible.
Department of Roads Director General Ramhari Pokharel offered a middle view, noting that while short-term projects could face real difficulty, longer projects are allowed to claim compensation proportional to the price increase based on the Nepal Rastra Bank price index.
For context, Eve Construction News tracks Kathmandu Valley material prices monthly. Our October 2026 rates show OPC 53-grade cement at Rs 730 per bag and Fe-500 rebar at Rs 103 per kg, both trending upward. See https://eve-construction.com/material-prices/.
Source: New Business Age, “FCAN warns of halting all construction works over cement price hikes” (https://newbusinessage.com/news/41785/fcan-warns-of-halting-all-construction-works-over-cement-price-hikes/).