Tag Archives: Nepalese

A Brief Review of Escalating Number of Disasters in Nepal

Nepal-Earthquake(Photo Source: Google)

Mid April 2014, a deadly avalanche on Mt. Everest killed over a dozen Sherpa guides. After a long dispute between the Nepalese government and the Sherpas, few of the insurance, compensation and safety related demands were met by the government. Foresight of the government and the relevant agencies would have made the aftermath a lot smoother as far as adequate insurance compensations for the deceased trekkers’ families were concerned.

Around the same time, late April 2014, A landslide hit the tunnel of Upper Madi Hydropower Project (25 MW) in Sildjure VDC, Kaski district of Nepal.  Over a dozen workers including a Chinese national were trapped in the under-construction tunnel. Three workers were found dead while rest were saved after a long and treacherous rescue efforts.

A massive landslide in Sindhupalchowk district of Nepal took hundreds of lives in early August, 2014. The Sunkoshi River and the roads were blocked in the region for weeks. Thousands of people in the region were affected and struggled for livelihood. The Sunkoshi Small Hydro-power Plant (2.5MW) remained submerged underwater for weeks when the river rose up to 30 meters in height forming a pool of water following the landslide and river-blockage.

In the following days, the landslide triggered chain of events including loss of lives, properties, infrastructures, supply-chain and businesses in many sectors. Ministry of Home Affairs (MoHA) estimates that, between June and September, 2014, there were 265 dead, 256 missing and 157 injured due to floods and landslides alone.

Around mid-October 2014, cyclone Hudhud, hovering in Nepalese sky, claimed dozens of lives and left unforgettable scars in the domestic tourism circuit. Although storms and heavy rain caused by Hudhud was devastating in the Indian states of Orissa and Adhra Pradesh, the scale of damages predicted for Nepal was rather moderate at the time. On the contrary, by the time the cyclone reached the heights of Nepalese mountains, it triggered deadly snow blizzards and avalanches in the Himalayas. There were hundreds of trekkers (national and foreign) on the mountains while means of communication were mostly disrupted when the storm hit the region.

It is apparent that the weather related information were not spread out in accurate and timely manner to the end users. The hydrological system in South Asia is strongly controlled by the Himalayas, which act as barriers for monsoon rains. The Hudhud’s effects could have been expected or minimized (if not predicted or prevented) by the Goernment and preparedness/response procedure (if it already had one in place) could have been followed to mitigate the loss.

Nearly 82 years after the mega earthquake of BS 1990, Nepalese were heavily shaken by the recent M 7.6 earthquake on Saturday, 25th April, 2015 and a major aftershock of M 6.8 on Tuesday, 12th May, 2015. Although the earthquake-epicenters were located in Gorkha and Dolakha districts respectively, the devastations left around 9,000 dead, 23,000 injured and thousands homeless all over the country. As per the Post Disaster Needs Assessment (PDNA), the private sectors have sustained over three times in damages and losses i.e. NPR 540 billion compared to the damages and losses of NPR 166 billion incurred by the public sectors.

More recently, the economic blockade imposed by India is no less than a man-made disaster for the Nepalese people and businesses facing dire need of petroleum products and other emergency supplies. Besides day to day inconveniences faced by the people, thousands of private sector industries and businesses were shut down within a week due to inadequate supply of fuel and raw materials from India. The blockade has interfered with every possible socio-economic dynamics of the country including, transportation, schools, hospitals, offices, business, services, households, festivals, entertainment, etc….

(NOTE: Please click the link below to read the entire article “Series of Disasters in Nepal: An Urgent Call for Preparedness”)

Series of disasters in Nepal: An urgent call

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Nepalese construction sector industries/factories: In the wake of the Gorkha Earthquake 2015

Construction Materials(Photo Source: Google)


The impact sustained by the construction sector businesses in Nepal has far-reaching repercussions which need to be analyzed to support the ongoing reconstruction efforts as well as to prepare for future disaster situations. Nepal was heavily impacted by M 7.6 earthquake and a major aftershock of M 6.8 on 25th April and 12th May of 2015 respectively.

Post Disaster Needs Assessment (PDNA) published by the National Planning Commission, Government of Nepal estimates that the total damages and losses caused by the Gorkha Earthquake is NPR 706 billion (US$ 7.0 billion) which is about one third of the country’s Gross Domestic Product (GDP) in FY 2013-2014. The private sectors sustained over three times in damages and losses compared to the public sectors. The Housing & Human Settlements alone sustained about 50 percent of the total damages and losses.

Out of over 100 brick chimneys inside the Kathmandu valley, almost all collapsed in the wake of the Gorkha Earthquake while most of the iron and cement industries outside the valley were structurally intact and suffered no significant downtime during the earthquake. Businesses which suffered fewer damages and reduced downtime had better probability of continuing their business. Besides, high prices of construction materials and even higher rate of migrating labors out of the country would be another major bottleneck to consider during the reconstruction phase.


The Gorkha Earthquake had an extensive impact on private sector businesses nationwide and in coming days/years this would inevitably show up in construction businesses as well. As per the Federation of Construction Materials Business Association of Nepal (FCMBAN), consumers will face a price hike of around10 to 15 percent on cement, 10 percent on reinforcement steel bars and 40 percent on sand & aggregates. The price of bricks is expected to increase arbitrarily in the next fiscal year with around 25 percent hike in wages of workers.

Immediately after the disaster, the demand for bricks came to a complete halt while the demand for other construction materials such as cement and steel rods have been confined to 30 percent as compared to the same period in previous fiscal year. It is predicted that although there will be sufficient capacity to fulfil the demand for cement, there will be significant crisis for iron rods and bricks. There could also be artificial scarcity and price hike for bricks, sand, aggregates as well as construction labor. (The Himalayan Times, June 2015)

Brick Industries

The Federation of Nepal Brick Industries (FNBI) predicted the damage loss to be around NPR 1.2 billion while around 90 percent brick kilns came to a complete halt following the earthquake. Around 70 percent of them were in need of complete renovation. The government stated that there was a need of at least 12 billion brick to raise the damaged buildings. FNBI claimed that Nepal produced around 3 billion bricks every year prior to the quake. With the four-fold increase in the demand of bricks during reconstruction phase, meeting the demand remains a challenge for the entire brick industry today. There were around 850 brick kilns across the nation operating before the earthquake. With over 100 damaged brick kilns within Kathmandu valley alone and a total of around 350 damaged kilns across the country, meeting the construction needs remains a major challenge for this industry. (My Republica, July, 2015)

Cement Industries

As per Cement Manufacturers Association of Nepal (CMAN), the immediate ban on construction after the earthquake had induced an estimated 85 percent dip in the demand for cement. As the cement factories were operating only at 50 percent of installed capacity at the time, they could fulfill an extra 50 percent demand in the coming days when reconstruction would be in full swing. According to CMAN, the annual consumption of cement totals 4.5 million Metric Tons and there are 45 cement factories operating across the country. (The Himalayan Times, June 2015)

Iron & Steel Industries

Nepal Steel and Iron Rolling Mills Association (NSIRMA) assured that although post-earthquake Nepalese steel and iron industry were utilizing only around 48% of its production capacity, it would still be sufficient to meet the reconstruction demand. There are around 20 steel and iron factories operating across Nepal. This sector consists of industries like the rebar industry, corrugated iron industry, and wire industry, among others. The steel rod industry, under normal conditions has an estimated annual production capacity of 1.5million tons. Likewise, the corrugated iron industry and wire industry has an annual production capacity of around 300,000 tons and around 200,000 tons respectively. (New Business Age, July 2015)

(NOTE: A detailed account of the Gorkha Earthquake impacts, related to employee casualty, damage/revenue losses, employment loss including business recovery time, production capacity, nationwide demand and market price fluctuations of various construction material businesses such as Brick, Cement, Reinforcement steel bars, CGI sheets GI wire, has been analyzed and presented in a research study carried out following the disaster. Please refer the links below.)  

(Part 1 of 3) Impact on construction sector businesses in Nepal due to the Gorkha Earthquake 2015 and its potential implications on reconstruction

(Part 2 of 3) Impact on construction sector businesses in Nepal due to the Gorkha Earthquake 2015 and its potential implications on reconstruction

(Part 3 of 3) Impact on construction sector businesses in Nepal due to the Gorkha Earthquake 2015 and its potential implications on reconstruction

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(Part III) The Gorkha Earthquake 2015: Economic Impact on Nepal Tourism

Tourism 3(Photo Source: Google)

4. Earthquake Impact on Tourism & Sub-Sectors

With full destruction damages of NPR 5,053.5 million and partial damages of NPR 13,809.3 million, the tourism sector has sustained total damages to assets worth NPR 18,862.8 million which mainly includes hotel accommodations, restaurant facilities, furniture, homestays, eco-lodges, trails, etc.

Destruction of tourism facilities combined with the drastic decline in foreign tourist arrivals post disaster have significantly impacted the revenue generation from the tourism sector. An estimated total of NPR 62.4 billion of losses in revenue would include tourism revenues, air transport revenues, tour operator revenues, trekking revenues and restaurant revenues.

The losses in revenue seem to cascade for several years starting from May 2015 thru June 2017. Losses are expected to stop once all the destroyed assets are rebuilt and the number of tourists have recovered to normal levels. Of the total damages and losses estimated in tourism, the private sector shares a whopping 92% i.e. over NPR 75 billion.

4.1 Hotel Accommodation:

The majority of registered hotels are located in the two main tourist hubs of the country i.e. Kathmandu and Pokhara. Hotels range from non-star tourist standard to five star accommodation in these locations. As per the 2012-Survey of Central Bureau of Statistics (CBS), there is a total of 522 star and non-star hotels with 11,087 beds and 21,498 rooms within the Kathmandu valley alone (Table 4.1A).

A survey conducted by Pokhara Tourism Council in 2013 shows that there are 230 tourist standard hotels and 320 common regular type guest houses in Pokhara city (Table 4.1B). Likewise, nationwide there is a total of 730 star and tourist standard hotels with 15,266 beds and 34,382 rooms (Table 4.1C).

Table 4.1A: Number of hotel accommodation in Kathmandu valley by category & capacityTable 4.1A

 Source: Census of Manufacturing Establishments 2011/2012, Central Bureau of Statistics (CBS)


Table 4.1B: Tourism facilities in PokharaTable 4.1B

 Source: Field Survey, 2012, Tourism in Pokhara, Pokhara Tourism Council, 2013


Table 4.1C: Hotel accommodation in Nepal by category & capacityTable 4.1C

Source: Ministry of Culture, Tourism & Civil Aviation, Tourism Industry Division (2070 B.S.) & PDNA

The number of star hotels reached to 118 by mid-January 2015 with addition of one hotel in this period. The number of tourist class hotels except star hotels has increased to 957 by mid-January 2015. Similarly, the number of beds in star hotels reached to 9,554 while the number of beds in tourist class hotels other than the star hotels has reached a total of 26,625 by mid-January 2015.

In the wake of the disaster National Society for Earthquake Technology-Nepal (NSET) touched base with around 40 star hotels throughout the Kathmandu valley to seek preliminary damage situation of the hotels. Nearly 30% were found to be in bad shape with either significant structural or non-structural damages reported over the phone. Few weeks after the major shock of 25th April, NSET, along with the members from Ministry of Culture, Tourism and Civil Aviation (MoCTCA), Hotel Association of Nepal (HAN) and Department of Urban Development & Building Construction (DUDBC) was involved in conducting rapid damage assessment of 81 buildings of 48 hotels & resorts within Kathmandu Valley. Among them inspected, 3 hotels were found unsafe. The damage assessments helped most of the hotels in Kathmandu to decide over continuous operation as well as to determine their options for repair, maintenance or retrofitting.

A significant total NPR 16,295 million (worth around 86% of the total damages in tourism sector) of earthquake damages in tourism sector included the partial or full destruction of hotel buildings, infrastructures, restaurant facilities and furniture in the affected areas (Table 4.6). A few hotels in the Kathmandu Valley including Nagarkot were completely damaged with a majority suffering minor cracks. As estimated by the Hotel Association of Nepal (HAN), in the wake of the disaster, the occupancy level of the hotels in the valley was no more than 25% to 30%. Various tourist accommodations of different types were either fully or partially damaged in the Langtang, Gorkha-Manaslu, Khumbu, Charikot, Kalinchok, Jiri and Rolwaling areas and in Dhanding district.

4.2 Homestays & Eco-lodges:

As per Ministry of Culture, Tourism & Civil Aviation, 2014 update, there are 226 registered community and private homestays around Nepal but a significant number of homestays are not yet registered with the government. As per the survey performed by Nepal Tourism Board (NTB) in 2011, the total number of non-registered properties was 2,604, which provided 35,789 tourist rooms and 69,040 tourist beds in the 15 major and 5 minor tourism sites. Most of these additional lodgings are homestays, teahouse lodges and monastery accommodations.

NPR 1,720 million worth of damages in homestays infrastructures were recorded. The amount is 9% of the total damages experienced by the tourism sector. Further, in coming days NPR 495.3 million of losses are estimated in Homestays. National Trust for Nature Conservation (NTNC) estimated that NPR 415.3 million of damages were suffered by the Eco-Lodges in conservation areas (Table 4.6).

4.3 Restaurants:

Production of hotel & restaurant sector combined had recorded a growth of 6.8 percent in the fiscal year 2013/2014. Production of this sector is estimated to have grown by 4.0 percent in the fiscal year 2014/2015. Decreased tourist arrivals, physical damages caused to hotels and restaurants by the earthquake and fall in domestic tourism activities have resulted in low growth of this sector in the current fiscal year as compared to that of the previous fiscal years.

Restaurants in Kathmandu reported that a total of 335 contractual workers lost their jobs after the earthquake. Restaurant in the Kathmandu Valley alone expected to register NPR 11.1 million in income loss during the months of May thru December 2015 (Table 4.6).

4.4 Trekking:

The tourism statistics for 2014 shows a total of 1,860 trekking agencies and 61 rafting agencies in Nepal compared to 1,524 and 40 in 2012 respectively (Table 4.4A). Trekking Agencies’ Association of Nepal (TAAN) reported about 40,000 employees (including guides, porters, cooks, etc.) engaged in the trekking subsector in all the major trekking destinations had no jobs between May and July 2015.

 Table 4.4A: Registered tourism industries

Table 4.4A

Source: CBS, 2012 and MoCTCA, 2014

Compared to last couple of years (Table 4.4B), the trekking visitors in the higher end segment are more likely to cancel their visits and the impact is expected to be a 70 percent reduction over a 12 month period after the earthquake. The number of lower-end trekking groups is expected to recover relatively quicker, with an estimated reduction of 20 percent over the same period.

Table 4.4B: Major trekking destinations & number of arrivalsTable 4.4B

Source: MoCTCA, 2014

A notable number of infrastructure destructions have badly hit the trekking sector. 150 kilometers of trekking trails have significant damages and 200 kilometers require maintenance and repair to make it safer for trekking. It is estimated that the trekking trails have sustained the damages of about NPR 426.1 million. Further an estimated NPR 5,711.3 million worth of income loss in trekking was expected by the end of 2015 alone (Table 4.6).

4.5 Travel & Tour Operators:

The tourism statistics for 2014 above shows a total of 2,567 registered travel agencies and tour operators in Nepal compared to 2,116 in 2012 (CBS, 2012)(Table 4.4A). Nepal Association of Tour Operators (NATO) estimated NPR 6.9 million worth of damages suffered by the Travel & Tour Operators in Nepal due to the earthquake. Further, NATO estimates showed that tour operators are expected to lose NPR 1,852 million worth revenue during May-Dec 2015, NPR 1,229 million revenue during Jan-Jun 2016 and NPR 1,843 million revenue during Jul 2016-Jun 2017, amounting a total of NPR 4,924 million losses in revenue (Table 4.6).

4.6 Air Transport:

Tourism Employment Survey, 2014, MoCTCA estimates that there are nearly 20,000 airlines jobs created by the tourism industry. Domestic airline operators reported total monthly income losses of about NPR 400 million for the month following the earthquake.

Airline Operators Association of Nepal (AOAN) estimated that the domestic airlines would suffer NPR 2,000 million worth of revenue loss during May-Dec 2015, NPR 1,280 million of revenue loss during Jan-Jun 2016 and NPR 1,440 million of revenue loss during Jul 2016-Jun 2017; a total of NPR 4,720 million losses in revenue (Table 4.6).

Table 4.6: Summary table of estimates of damages and losses in tourism & sub-sectorsTable 4.6

Source: Post Disaster Needs Assessment (PDNA), National Planning Commission, GoN

4.7 Other Sub-sectors:

Besides major tourism stakeholders and sub-sectors mentioned earlier there are other tourism related subsectors providing their services. Civil Aviation Authority of Nepal in 2013 (Table 4.7A) and Ministry of Culture, Tourism & Civil Aviation in 2014 (Table 4.7B) showed an increasing market trend of tourist, trekking and river guides as well as consistent market trend in ultra-light, paragliding, skydiving, etc. These service providers had to suffer significant losses due to reduced number of tourists coming to Nepal.

Table 4.7A: Other tourism related firms & service providers

Table 4.7A

Source: Civil Aviation Authority of Nepal (2013)


 Table 4.7B: Other tourism related firms & service providersTable 4.7B

Source: MoCTCA, 2014


Table 4.7C: Estimation of earthquake damage/loss in culture heritage sector of NepalTable 4.7C

Source: National Planning Commission, GoN

Following the Gorkha Earthquake, many roads and access trails to remote pilgrimage sites were cut off. All seven World Heritage zones in the Kathmandu Valley were closed and ticket collection from tourists was suspended. In the Kathmandu valley alone the losses from reduced revenues from the sale of tourist entry tickets to the World Heritage Sites and museums was estimated at USD 6.2 million over the 12 months period after the quake. (Table 4.7D).

Table 4.7D: Losses from tourist ticket sales

Table 4.7D

Source: Post Disaster Needs Assessment (PDNA), National Planning Commission, GoN

A large portion of key tourism monuments and heritage attractions have been reduced to rubble. Few months after the disaster, the Tourist Guide Association of Nepal (TURGAN) reported that 228 tour guides were no longer employed as a result of the earthquakes as there were hardly any tourists to take around in Durbar Squares in Kathmandu, Bhaktapur and Patan areas. Nearly a year after the catastrophe, the number of visitors seems to be rising again.

5. Cost of Recovery:

The PDNA priced the total earthquake damages at NPR 517 billion, losses at NPR 189 billion and recovery needs at NPR 669 billion, roughly a third of the economy. Early estimates suggested that an additional 3 percent of the national population (around a million people) was pushed into poverty as a direct result of the earthquakes.

The cost of recovery for tourism is nearly NPR 39 billion which is 5.8% of the total recovery needs of the country. Starting from the demolition of damaged structures & rubble removal to reconstruction & recovery activities, there are numerous sub-sectors such as hotels & accommodations, trekking, tour operations and loan rescheduling as well as extensive promotional campaigns which need recovery attention currently.

Table 5: Summary of the cost of recoveryTable 5

Source: Post Disaster Needs Assessment (PDNA), National Planning Commission, GoN

There are costs attached to respond to the market slackness endured both by the Nepal Tourism Board (NTB) and the industry as a whole. The NPR 400 million annual marketing spend of NTB under normal situations and the approximately NPR 1,800 million aggregated total marketing and promotion spend of the private sector may have to be increased multiple-fold to recover and revive the tourism market. It is estimated that over NPR 5 billion will have to be spent over the next couple of years for the targeted tourism promotional campaigns (Table 5).

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(Part I) The Gorkha Earthquake 2015: Economic Impact on Nepal Tourism

(Part II) The Gorkha Earthquake 2015: Economic Impact on Nepal Tourism

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(Part II) (1 of 2) Construction Focus Four: Struck-By Hazards

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(Part I) (2 of 2) Construction Focus Four: Fall Hazards

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