Contractors seek raise in overhead cost by 10%

The cost of executing the development projects could go up by 10 percentage point, if the contractors working across the country get their 15-point declaration implemented.
Federation of Contractors Association of Nepal (FCAN), which unveiled a 15-point declaration at the end of its two-day 15th General Convention in Bhairahawa on Monday, said it will ask the government to raise contractor´s overhead cost to 25 percent from existing 15 percent. The Convention even entrusted its executive body to push the government to get this raise.
“The raise is necessary as prolonged political transition has rendered timely execution of development works extremely difficult, and the cost of labor too has gone up sharply,” FNCAN said in the declaration, which it has vowed to translate into action soon.
The convention also decided to ask the government to incorporate a categorical provision on variation in all tender documents, arguing that such inclusion would end long-running problems of claims and counterclaims that contractors face while receiving payment in case of project over-run.
The convention also entrusted the FCAN to take initiatives for enactment of new policies and rules to protect their rights and promote contractors. There are more than 15,000 contractors of varying size operating across the country.
Though there exists a policy and law to guide the construction works, contractors said the state has simply not recognized the people that execute the development works.
The contractors also expressed concerns over growing unprofessional interference in their works by authority and diverse groups and urged the FCAN office bearers to take steps to end such a situation. “Such unprofessional behaviors have created problems for us to carry out our works smoothly,” the declaration read.
The convention also asked the FCAN to negotiate with the government to reduce the volume of works that can be executed through the local consumer committees. The declaration has also requested the government to allow them to locally source the river products like sand and aggregates while executing development works.
Among others, the general convention of the FCAN has also decided to start a process to procure land and build a FCAN Tower - an official building of the federation - in the near future.