As per Nepal Economic Survey 2017/18 conducted by the Ministry of Finance, the construction industry contributes to an estimated 7.7% of Nepal’s overall GDP. The Foreign Direct Investment (FDI) contribution in the form of equity equalled NPR 626.7 million, mainly in the cement industry and construction companies where major construction projects are related to hydropower, road, airports, irrigation and cultural heritage. The annual growth rate of this sector has been estimated to be around 9%. The same survey also revealed that the industry employs one million people--14% of total employment generation in the country. However, an estimated 40% of those employed in 2018 were  non-Nepalis, primarily from India and Bangladesh. 

Due to the heavy concentration of non-Nepali workers, the construction-related industries, including the large infrastructure development projects, underwent shortage of labour for a longer period due to the coronavirus pandemic. Moreover, due to contraction of other employment sectors—such as the hospitality and tourism sectors—and government’s focus on the development of large infrastructure development projects and ongoing post-earthquake reconstruction, this sector has the potential to employ a substantial number of people in the long-term.

UKaid सीप’s partnership with  MAW Earth Movers Pvt. Ltd. (MEPL), since 2019, is designed to bridge skilling gaps and provide gainful employment for Nepali youth in Heavy Equipment Operation and Mechanics job roles via state-of-the-art Operator Training Centres—aligned with international JCB and national Council for Technical Education and Vocational Training (CTEVT) standards—at Provinces 2, Bagmati and Lumbini Provinces. Using an industry-led systems strengthening approach, this partnership established an industry-led MAW Skills Academy that is working with local training institutions, government, and NGOs to upgrade and expand employment-linked training delivery capabilities and access in underserved geographic regions of Nepal. This partnership has introduced several gender inclusive outreach and marketing tactics, including a special scholarship fund and accommodation provision, to reach and mobilise greater numbers of women and youth from disadvantaged communities embarking on a path to inclusion for the first time as an industry. (View More...) 

The Department of Transport Management (DoTM) suggests that there is a growing trend of heavy equipment being imported and used for various jobs. Multiple construction projects like hydropower, airport, road, and irrigation, among others are underway in the country which have led to a significant rise in demand for heavy equipment operators are indicative that there is a huge untapped potential that can create direct employment for a large number of operators and mechanics. However, with lack of appropriate skills, competency and capital, the sector is not performing as per its potential. Those who have attained training tend to fly abroad for better salaries and opportunities. UKaid सीप aims to unlock these constraints and work with the private and public sectors towards creating employment opportunities in the construction sector.  

In the recently unveiled annual budget of the Government of Nepal for the Fiscal Year 2021/22, NPR 138 billion is allocated for the Ministry of Physical Infrastructure and Transport which will oversee all development projects related to roads, rail and water transport development for next five-year. Among the major budget allocations are on construction and renovation of airports with a budget of NPR 20.31 billion; while NPR 43.54 billion has been dedicated to the water supply network. NPR 15.34 billion has been allocated for the expansion of the East-West Highway; NPR 10.03 billion for the railway development; Kathmandu-Terai fast track has been allocated NPR 8.15 billion; the postal highway allotted with NPR 6.39 billion. Similarly, resumption of other infrastructures development projects of national pride and private construction works can create employment opportunities in this sector with a capacity to create more than 40,000 jobs for various employment roles in transportation, hydropower and heavy equipment operations. But the industry continually faces a shortage of skilled labour force, further aggravated by the Covid-19 pandemic. Moreover, the recent increasing trend of using local construction raw materials like limestones for cement industries and exploration of mining of iron, copper in districts like Nawalparasi and Palpa shows that the construction sector will emerge as the strong and prominent sector for skilling and employment creation.