Nepal’s infrastructure ministry has announced a special price adjustment for the construction sector, a decision that directly answers contractors’ warnings that soaring material prices could halt projects across the country. Infrastructure Development Minister Sunil Lamsal announced the decision on his official Facebook page on October 5.
The decision invokes Section 55, Subsection (1a) of the Public Procurement Act, 2063, to apply special price adjustment on public construction contracts. It covers petroleum products, bitumen, HDPE pipes, cement, and rebar (dandi), materials whose prices have risen abnormally because of international conflict and disruptions to global supply chains.
Special price adjustment Nepal construction contracts: who qualifies
The adjustment applies to public construction contracts whose performance period was still running after 15 Chaitra 2082 (late March 2026), calculated on the basis of actual and verified consumption of the affected materials. Annual contracts and contracts that have no price adjustment provision at all are also brought under the scheme, provided they meet the prescribed criteria.
For contracts that already contain a price adjustment clause, the amount receivable under the existing provision and the contract will be deducted first, and only the remaining eligible amount will be paid as special price adjustment. The ministry says the scheme addresses only price rises created by extraordinary circumstances, not ordinary market fluctuation, and that amounts will be fixed strictly on real consumption, verified quantities, and documented prices, so that no double benefit or unnecessary payment occurs.
Why the decision matters now
The announcement lands days after the Federation of Contractors Associations of Nepal (FCAN) warned it would suspend all construction if cement and steel price hikes persist. FCAN said cement had risen by more than Rs 200 per bag and steel rods by Rs 15 per kilogram within a month, and accused manufacturers of cartel pricing. Read our coverage: https://eve-construction.com/fcan-warns-construction-halt-price-hikes/
The stated objective of the decision is to keep construction from stopping under extraordinary international conditions, to give continuity to ongoing development projects, and to address the imbalance created in the construction sector in a fair manner. For contractors squeezed between fixed contract rates and rising input costs, the mechanism offers a formal route to claim relief instead of abandoning sites.
Contractors should watch for the ministry’s detailed implementation criteria, including the documentation needed to prove actual consumption, before filing claims.
Source: Minister Sunil Lamsal’s Facebook post, October 5, 2026 (https://www.facebook.com/ersunillamsal/posts/pfbid0Mzzf3EvFUni2wib8Bn5EudUi4gTVs6bU2c9AveQ5SVQ22ewvER2biXLBZnkLjWkCl).