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Date: November 19, 2025
Editor: Nepal Construction Times Desk
Top Construction Highlights of the Day
1. KMC Begins Construction of Devinagar Sports Park
Kathmandu Metropolitan City has commenced construction of a modern sports park in Ward 10, Devinagar, with a project cost of Rs 28.14 million. Built on reclaimed public land near the Dhobikhola Corridor, the facility will feature a futsal ground, badminton court, open gym, and landscaped green areas. The project is expected to be completed by October 2025 under Hans-Chhapur JV.
Impact: Strengthens Kathmandu’s urban recreational infrastructure and boosts local employment.
2. NRB Reports Construction Sector Credit Surges to Rs 232.8 Billion
New NRB data shows total credit to the construction sector reaching Rs 232.8 billion, driven mainly by major infrastructure investments.
- Highway & bridge projects: Rs 130.9 billion
- Residential construction loans: down to Rs 71.3 billion (-2.5%)
Implication: Public infrastructure remains the key engine of growth, while private homebuilding continues to soften.
3. Construction Sector Rebounds With 9.1% Growth in Q2
The construction industry posted a strong 9.1% growth in Q2 FY 2024/25, recovering from a 0.3% decline in Q1.
Drivers of the rebound include:
- Increase in material imports and domestic production
- Reactivation of paused infrastructure projects
- Improved private sector participation
However: High labor shortages and bureaucratic delays still hinder execution.
4. Non-Performing Loans Remain the Sector’s Biggest Threat
Despite growth, the construction industry continues to carry the highest NPL ratio at 7.28%, according to bank data.
Major issues include:
- Government payment delays to contractors
- Cash flow shortages among mid-size builders
- Slow progress even after NRB concessions
Risk: Rising NPLs could restrict future lending and slow project momentum.
5. Major National Projects Advancing Positively
Several landmark infrastructure projects continue to progress steadily:
- Nagdhunga Tunnel Road (2.68 km): Expected completion early 2026
- Hydropower build-up: Arun III (900 MW), Upper Trishuli-1 (216 MW), Upper Tamakoshi (456 MW)
- 150+ bridges under construction across provinces
Outcome: These mega-projects are creating jobs, improving connectivity, and shaping Nepal’s long-term economic foundation.
Key Challenges to Watch
- Persistent contractor payment backlogs from government agencies
- High financing stress due to elevated NPLs
- Material price volatility impacting project budgets
- Skilled labor shortages slowing execution timelines
Editor’s Note
Nepal’s construction sector is showing strong recovery signs—yet remains vulnerable to financial stress and bureaucratic inefficiencies. Sustaining momentum will require faster government payouts, tighter project oversight, and better loan management.
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