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Submitted to Submitted by Constraints of the Construction Constraints of the Construction Market in Earthquake Affected Districts in Nepal Market Research Study for the NPER Programme Final Report February 25, 2018 Submitted By Submitted To Nepal Development Research Institute Mott MacDonald), Shree Durbar Tole, Pulchowk, Lalitpur Kathmandu, Nepal GPO Box: 8975, EPC 2201, Kathmandu, Nepal Email: [email protected] Telephone: +977-1-5537362, 5554975 Table of Contents Abbreviation ....................................................................................................................... iii List of Tables ........................................................................................................ iv List of Graphs and Figures ....................................................................................... v Executive Summary ........................................................................................................... vi 1. Introduction ..................................................................................................................... 1 1.1 Background ........................................................................................................................................... 1 Objective of Study ....................................................................................................................................... 2 2. Methodology .................................................................................................................... 3 2.1 Approach of Study ................................................................................................................................ 3 2.2 Method and Tools ................................................................................................................................. 3 Desk Review ............................................................................................................................................ 3 Site Selection........................................................................................................................................... 3 Primary Data Collection .......................................................................................................................... 3 Direct Observation ............................................................................................................................... 4 2.3 Research Team ...................................................................................................................................... 4 2.4 Market and Sample Size........................................................................................................................ 5 2.5 Respondents of the Open Ended Interview (10) .................................................................................. 5 2.6 Final Sample Distribution ...................................................................................................................... 5 2.7 Field Monitoring, Management and Quality Assurance ....................................................................... 6 Pretesting of Research Tools .................................................................................................................. 6 Orientation to Research Team ................................................................................................................ 6 Field Plan ................................................................................................................................................. 6 2.8 Data Management and Analysis Plan ................................................................................................... 6 Data systematizing: ................................................................................................................................. 6 Analysing Data ........................................................................................................................................ 7 Ethics of research .................................................................................................................................... 7 Reliability of data .................................................................................................................................... 7 3. Finding and Discussion .................................................................................................. 8 3.1 Construction Material Market .............................................................................................................. 8 3.1.1 Market of Construction Materials in District ................................................................................. 8 3.1.2 MSMEs in Major and Minor Market Centres ................................................................................. 8 3.1.3 Use and Preference of Brick, Cement and Rod ............................................................................10 3.1.4 Availability of the Construction Materials ...................................................................................11 3.2 Quality of Construction Materials .......................................................................................................13 i 3.3 Price of the Construction Materials ....................................................................................................16 3.2.1 Market Structure..........................................................................................................................16 3.2.2 Price Determination Mechanism and Price Fluctuation ..............................................................16 3.4Rules and Regulations ..........................................................................................................................19 3.4.1 Polices on Quality Control and Market Competition ...................................................................19 3.4.2 NRA Polices and Guidelines .........................................................................................................20 3.4.3 Housing Permit and Approval ......................................................................................................21 3.5 Access to Finance ................................................................................................................................23 3.5.1 MSMEs and Contractors ..............................................................................................................23 3.5.2 Households and Owners of commercial Building Units ...............................................................24 4. Issues and Gaps in Housing Reconstruction ............................................................. 28 5. Conclusion .................................................................................................................... 31 6. Avenues for Improvement ............................................................................................ 32 6.1 In Supply Chain Management of Construction Materials ............................................................32 6.2 Primary and Secondary Intermediaries ........................................................................................32 6.3 Households and Commercial Building Units ................................................................................33 6.4 Policies/Rules and Guidelines ......................................................................................................33 Annexes 1: Questionnaire for the MSMEs in the Construction Sector ......................... 34 Annexes 2: Questionnaire for the Users of Construction Services and Products ....... 55 ii Abbreviation BFIs: Bank and Financial Institutios CFUG: Community Forestry User Group CSEB: Compressed Stabilised Earth Blocks DCCI: District Chamber of Commerce and Industries DDC: District Development Committee DFID: Department for International Development DRR: Disaster Risk Reduction GDP: Gross Domestic Product GoN: Government of Nepal GPs: Gaunpalika KII: Key Informant Interview KISAN: Knowledge-Based Integrated Sustainable Agriculture in Nepal MSMEs: Micro, Small and Medium Enterprises NAMDP: Nepal Agriculture Market Development NBSM: Department of Nepal Bureau of Standard and Metrology NDRI: Nepal Development Research Institute NPER: Nepal Post Earth NPs: Nagarpalika NRA: Nepal Reconstruction Authority OPC: Ordinary Portland Cement PPS: Probability Propionate to Sample NAMDP: Nepal Agricultural Market Development Programme iii List of Tables Page No Table 1: Name and Responsibility of the Team Members 4 Table 2: Sample Markets in Dhading and Nuwakot Districts 5 Table 3: Sample Distribution 5 Table 4: Use of Business Practices 8 Table 5: Challenges of MSMEs in Nuwakot and Dhading Districts 9 Table 6: Preference of the Construction Materials in Dhading and Nuwakot Districts 11 Table 7: Availability of the Construction Materials 12 Table 8: Purchasing Construction Materials 12 Table 9: Perception of Materials Purchased of High quality 14 Table 10: Perception on Quality of the Construction Materials 14 Table 11. Testing Lab and Fee Payment 15 Table 12: MSMEs Willingness to Pay for Land Test 15 Table 13: NRA Policies and Guidelines for Private Housing Reconstruction 20 Table No 14: Types of Institutions for Funds 24 iv List of Graphs and Figures Page No Graph 1: Determination of Price for Construction Materials 17 Graph 2: Did you pay any extra money for the building permit? 21 Graph 3: Source of Funds 23 Graph 4: Did you
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