Prosperity not possible in absence of Construction Business: Deputy PM Poudel

Kathmandu / June 15: Deputy Prime Minister and Finance Minister Bishnu Poudel has termed the construction industry as a ‘pillar’ of prosperity and praised the pace of ongoing construction works even in an adverse situation caused by the COVID-19 pandemic.

During his meeting with the Federation of Contractors’ Associations of Nepal (FCAN) today, Deputy Prime Minister Poudel said that a prosperous Nepal could not be imagined of without the construction business. Advising the delegation to ensure quality deliveries on time, the DPM was of the view of ending the trend of making tender bids at a low cost.

On the occasion, he pledged to take all possible initiatives for the implementation of FCAN’s submissions in regard to the budget of the fiscal year 2078/79 BS (2021-22).

The FCAN delegation has sought the automatic extension of the deadline of all the construction projects by mid-November, bearing in mind the impact of the COVID-19 pandemic in the construction sector.

Two major working seasons could not be utilized due to the COVID-19 crisis since last year, rains, and subsequent festivals, the FCAN said, adding a period from coming mid-November to mid-July would be appropriate for undertaking construction works. In the case of a construction project requiring a deadline till mid-July, 2022 and beyond, the deadline should be extended as per the need on the basis of technical confirmation, it asserted.

Contractors said that there would not be any loss to the state if cent per cent bank guarantee is returned rather than a provision of returning 50 per cent bank guarantee as mentioned in the budget, demanding cent per cent bank guarantee should be returned to make the economy dynamic during this difficult period due to COVID-19.

According to the FCAN, the amount kept in the bank would come to the market which would help both—the government and contractors.

The FCAN suggested that the provision of deduction of fees, fines and additional charges should be clearly implemented by the Inland Revenue Office through the Ministry of Finance in accordance to the Income Tax Act 2058, Value Added Tax Act 2052 and Excise Duty Act 2058.

It also urged the Finance Minister to clearly stipulate about the facility of refinancing by adding the limit of contract loan keeping the small and middle-scale contractors as it would be difficult to meet expenses since development works could not be possible this year too due to prohibitory order following COVID-19.

FCAN has also urged the government to include the construction industry among the beneficiaries of the 2 per cent interest reduction on the loan invested in the construction industry, the facility provided as relief to the hardest-hit industries, in the context of development construction works not making headway due to the adverse situation created by the COVID-19 pandemic.

The consruction entrepreneurs have stated that they are not in a position to pay back the loan since construction works have not taken place due to COVID-19 and as construction works would come into operation only from coming November or after the Dashain/Tihar festivals even though this year’s prohibitory order is lifted.

The Federation also urged the Finance Minister to make arrangements for converting into refinancing the principal and interest from mid-April 2020 till date, and for payment of the remaining principal and interest in installments over 24 months period.

Present in the meeting were FCAN president Ravi Singh, honorary member and former MP Jeep Chhiring Lama Sherpa, senior vice-president Nicholas Pandey, associate vice-president Ang Dorji Lama (AD), general secretary Roshan Dahal, office chief Prem Singh Aeir, public relations officer Ram Chandra Giri, among others.