Imports of heavy equipment soar amid building frenzy
Imports of heavy equipment bounced back in the last fiscal year after going through rough patches during the previous two years. According to the Department of Transport Management, registration of heavy equipment, which includes cranes, dozers, excavators and trucks, increased 150 percent in fiscal 2012-13 compared to the previous fiscal. The number of heavy equipment registered reached 3,332 last year compared to 1,333 before. The figure was 1,969 in 2010-11.
Traders said that the growth rate for heavy equipment would be closer to 20-25 percent. “Since the government data includes trucks, the figure is way high. Imports of dozers, cranes and excavators have gone up 20-25 percent,” said Tanka Bhatta, assistant general manager at Continental Associates, the sole authorised distributor of Komatsu in Nepal. He estimated that around 325 units of heavy equipment arrived in the country in the last fiscal.
Bhatta said that increasing business has given a respite to the sector despite a recession in the real estate market. Heavy equipment imports reached a 10-year high of 4,524 in fiscal 2009-10.
According to Bhatta, timely issuance of the budget, smooth operation of big projects and the road expansion campaign in the Kathmandu valley played a crucial role in the increment of the heavy equipment business. He added that projects like Upper Tamakoshi, Chameliya, Trishuli 3A and Marsyangdi, among others, were the largest buyers of construction equipment in the last fiscal. “Irrigation projects like Rani Jamariya Kularia and Sikta too were among the big customers,” Bhatta said.
Similarly, Sanjeev Deuja, marketing manager at the JCB division of MAW Enterprises, said that timely announcement of the budget accompanied by local development programmes, expansion of the roadway network and stability in the construction business were the key factors contributing to the growth of the heavy equipment business.
“The timely budget gave stability to the overall economy, and it had a positive impact on all the sectors. Problems of financing and liquidity crunch seem to be going away,” said Deuja. Financial institutions are financing heavy equipment at an interest rate of 14-15 percent. Around two years ago, the interest rate went up to 19 percent.
Traders predict big growth for the sector during this fiscal year. “Growth should reach at least 50 percent,” said Deuja, adding that road construction projects had started all over the country which would have an impact on the sector.
Similarly, Bhatta feels that the priority given to the energy sector by the government has given a positive outlook to the sector, and the industry is set to take a giant leap forward.