China’s reluctance to supply materials is hampering hotel construction in Nepal
KATHMANDU: Hotel construction in Nepal has been delayed after China showed reluctance to supply adequate furniture and fixtures.
Work has come to a standstill due to the unavailability of necessary pieces of furniture for two hotels owned by Siddhartha Hospitality Group and Barahi Group, which are currently under construction and are expected to start operations from April 14.
It is said that most of the hotels in Nepal bring furniture and other items from China because of the “cheap price”.
Currently, Hotel Sheraton, Hotel Barahi, Bhangeri Resort, Dusit Thani and Hyatt Palace are under construction.
The Sheraton hotel under construction in Thamel, owned by the former president of the Non-Resident Nepali Association, will also take another year and a half to become operational.
The construction cost of the hotel is estimated at Rs. 10 crore and the cost will increase by another Rs. 2 crore due to China’s undeclared blockade.
Recently, hotels have been in trouble as China has not prioritized selling furniture-related home furnishings to Nepal.
Hotel Sheraton
Nepalese businessmen are in trouble after China gave Europe, America and other countries priority in exporting its furniture.
Many Nepalese traders have imported goods from China due to the overall cost as it is expensive to import furniture from other countries including Europe.
China is also one of the largest exporters of wooden furniture. According to the General Administration of Customs of China, the export value of Chinese furniture and parts was US$53.69 billion in 2018.
Some of the major countries China exports furniture to are the European Union, the United States, Hong Kong, Japan, and Vietnam.
According to the Statistical Communiqué on the 2020 National Economic and Social Development, the value of furniture and furniture parts exports was US$63.50 billion in 2020, up 12.2% year-on-year.
During the Covid-19 pandemic, almost all industries have been affected to some extent. However, the custom furniture market in China is projected to grow to US$52.54 billion by 2024.
According to the China National Furniture Association (CNFA), there are 50 furniture manufacturing clusters in China, covering the six regions of Pearl River Delta (PRD), Yangtze River Delta (YRD), Bohai Rim, Northeast China, Central China and West China.
The PRD is China’s largest furniture manufacturing base, with the highest furniture industry concentration, the highest production output and the strongest integrated support capability.
Next are Fujian, Zhejiang, Jiangsu, Shandong and Shanghai, which have a lead in product quality and operational management.
In the YRD region, led by Shanghai, the furniture industry is developing rapidly, with the highest average growth rate in the country. The northern and northeastern regions, centered on Beijing, have a solid base in the furniture industry and rich wood resources.
Hilton Hotels
The construction of the five-star hotel by the Siddhartha Business Group of Hospitality in Bhairawahawa has been delayed due to the unavailability of furniture and fixtures. The construction time is extended and the costs also increase due to the non-timely availability of goods.
Similarly, Barahi Group is building a five-star hotel with a shopping complex in Thamel, Kathmandu.
The commissioning date was forecast to be delayed by the arrival of essential items, including furniture.
According to Yogendra Bikram Thapa, Corporate Sales & Marketing Director of Barahi Group, construction work on the hotel is still pending.
The hotel is also being prepared to operate from the Nepalese New Year 2079. However, he said that due to the shortage of goods, the operating time would be extended and the costs would also increase. The hotel has completed 80 percent of the construction work. He said they imported the needed stuff from India.
Currently, traders hold containers in Chinese ports for three months by paying the waiting fees. Since the Chinese market is cheaper than others, many hoteliers have chosen China.
Similarly, Sajan Shakya, secretary-general of the Hotel Association of Nepal (HAN), said the organization stands ready to cooperate when confronted with the problem of buying goods from China by lobbying the government.
Due to the pandemic, the hotel sector has been negatively affected and the delay in building the hotels has increased investment, he added.
Additionally, hotels are being forced to operate at 5% occupancy during the pandemic.
The investment in the hotel is made once and the output will return to normal. He therefore suggested not to worry and calmed down on the matter, hoping that it would gradually subside.
Merchants have started bringing goods from China via India as China has not cooperated for easy goods import.
Goods imported from China have been halted at Kung Port for about a year and traders have stopped bringing goods through Kung after losing billions of rupees.
It is said that it was difficult to import goods through the Kerung and Tatopani border crossings due to Chinese officials.
“It takes about 40/42 days to ship goods from China via India. Goods arrive in Nepal within 20/22 days if brought from Tatopani and Kerung without hindrance. Traders are forced to import goods through India,” said political analyst and former ambassador to Denmark Vijay Kant Karna.
He describes it as a kind of economic blockade by China.
According to the trade protocol, a country must provide a landlocked country with access to the ocean.
However, China is also violating the protocol, he said, adding that only two to three trucks have entered Nepal recently.
Likewise, people from the neighboring districts of Nepal were allowed to enter China up to 20 kilometers away in order to buy goods without any problems.
“However, China is currently blocking easy access to the Nepalese people, showing China’s extremist stance,” he added.
Businessmen and locals complain that the two checkpoints (Tatopani-Khasa and Rasuwagadhi-Kerung) with China have not been working smoothly for a long time.
The Kerung and Tatopani checkpoints, which were closed after the start of the Covid-19, were not fully operational.
Although up to 250 trucks carrying goods used to enter Nepal daily, currently only 20 vehicles enter Nepal through these checkpoints daily.
According to the Rasuwagadhi Customs Office, only nine trucks enter Nepal from the Rasuwagadhi checkpoint and 11 trucks from the Tatopani checkpoint every day.
According to the Nepal Trans Himalaya Border Commerce Association, hundreds of trucks loaded with goods are stranded in China since the Chinese side has refused them entry into Nepal.
According to local hotelier Tenzing Tamang, Nepalese businessmen are struggling and truck owners have also suffered from China.
They say the container operators couldn’t even pay the bank interest.
“In the past, up to 200 loaded trucks came from China every day. No more than 5 trucks are coming to Nepal at the moment,” transporter Arjun Poudel told Khabarhub.
As many as 1,000 to 15,000 trucks are waiting their turn and it will take a year for a truck’s turn if China continues to block the border, he adds.
Similarly, local hotel and import-export businessman Cheten Gallpo Lama says, “Tourists have stopped coming, tourist activity is also minimal. China has so far been reluctant to open the border.”
