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Nepal has approved a temporary special price-adjustment process for public construction contracts facing abnormal cost increases linked to international conflict and resulting supply-chain disruption, according to reports published by OnlineKhabar on October 13, 2026, and Ratopati on October 12, 2026. The mechanism is conditional: contractors must apply to the relevant public entity, document actual costs and quantities, and show that existing contract-adjustment provisions do not adequately protect project continuity.
The reports describe a price-increase trigger above 10 percent, a reported ceiling of 25 percent of the original contract amount, and a 45-day examination period for the public entity. Because the government procedure and annex were not independently available for review, these details should be treated as reported provisions until the official text is checked.
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What the new mechanism does
The reported Special Price Adjustment Procedure—called the “Special Price Adjustment Procedure 2026” in OnlineKhabar’s English report and “Special Price Adjustment Procedure, 2083” by Ratopati—targets contracts whose ordinary price-adjustment clauses do not adequately reflect exceptional increases in construction inputs. Covered cost categories are reported to include materials, labour, fuel, equipment and transportation.
Relief is not automatic. A contractor must submit a supported application, and the public entity must verify the circumstances, quantities and prices before deciding whether a special adjustment is necessary to keep the project moving in the public interest.
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Ratopati reports that the Council of Ministers approved the procedure under Section 74 “A” of Nepal’s Public Procurement Act, 2063. That legal basis and the procedure’s exact wording should be confirmed against the government instrument before being relied on in a dispute or claim.
Who may qualify
OnlineKhabar reports that the process is aimed at contracts meeting all of the following reported conditions:
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- The tender was invited before the disruption caused by international conflict began.
- The contract was signed and work had started before that disruption.
- The contract period or defect-liability period continued beyond the disruption’s start.
- The exceptional circumstances have been verified.
- The existing price-adjustment arrangement is absent or inadequate, and a special adjustment is necessary for project continuation and public interest.
These conditions do not establish eligibility for any particular contract. The relevant disruption date, the contract’s clauses and the official procedure must be checked together.
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| Element | Reported rule | Important qualification |
|---|---|---|
| Price trigger | Increase greater than 10 percent from the price at the start of the disruption | Reported by OnlineKhabar and Ratopati in 2026; this is a procedural threshold, not an independent economic statistic. |
| Initial deduction | The first 10 percent of the increase is excluded from the special calculation | The official calculation method should be checked. |
| Overall ceiling | Special adjustment may not exceed 25 percent of the original contract amount | Reported cap; it is not a guarantee that a contractor will receive that amount. |
| Existing adjustment | Amounts payable under an existing legal or contractual adjustment provision are deducted | Only a remaining eligible amount may be paid as a special adjustment. |
| Application deadline | One month from publication of the relevant ministry’s price-adjustment notice | Reported by OnlineKhabar; the notice and its publication date determine the actual deadline. |
Ratopati describes a calculation based on the difference between the base rate at the start of the war and the prevailing rate 30 days before application, multiplied by the actual quantity consumed. That formula is a news-report description, not a substitute for the procedure’s annex; contractors should not use it for a claim until the official text confirms the reference dates, inputs and rounding rules.
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What contractors must submit
The reports indicate that an application should explain why the contract’s existing adjustment mechanism cannot absorb the abnormal increase and should include evidence that ties the claimed cost to work actually performed.
- Prices for the construction materials or other inputs claimed.
- Actual quantities consumed on the project.
- Purchase invoices and, where available, delivery records, supply agreements or comparable procurement evidence.
- A project-progress statement showing the position as of the application date.
- The contract and relevant price-adjustment provisions, so the agency can calculate any amount already payable under them.
Organising records by input, supplier, date, quantity and project activity can make verification easier. Record-keeping software may be used as an optional administrative aid, but no particular product is required or endorsed by the government.
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How the public entity is expected to decide
- Receive the application. The contractor files it with the public entity responsible for the contract, within the reported one-month window after the ministry notice.
- Check the contractual position. The entity determines whether an existing adjustment or compensation clause already covers the increase.
- Verify prices and quantities. Agencies may compare submitted prices with procurement evidence, approved norms and standards, and the actual quantities used.
- Inspect the project if necessary. The reports say site inspections and price checks may be carried out.
- Determine the claim. OnlineKhabar and Ratopati report a 45-day period for examination and determination.
- Record and report the result. Higher-level authorities are to be notified and consolidated records maintained, with safeguards against duplicate benefits and payment of unverified adjustments.
Contracts and payments reportedly excluded
OnlineKhabar says a contract is excluded if compensation has already been imposed. It also reports exclusion where a separate exceptional-cost provision applies and the contractor has received, or is entitled to receive, compensation under that provision. The same cost increase should not produce duplicate payment through overlapping mechanisms.
How long the procedure lasts
Ratopati describes the process as temporary. It reports that the infrastructure ministry will stop adjustment work under it one month after publishing an official notice that the international-war and supply-disruption situation has ended. The notice, the end date and the precise transition rules were not established in the published reports, so contractors should monitor the responsible ministry rather than assume the mechanism remains open indefinitely.
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Practical checks before filing
- Confirm when the tender was invited, when the contract was signed, when work began and when the contract or defect-liability period ends.
- Identify the disruption date used by the official procedure, rather than selecting a convenient market-price date.
- Separate costs already recoverable under the contract from the exceptional amount being requested.
- Reconcile invoices and delivery records with site quantities and approved work norms.
- Calculate the filing deadline from the ministry’s actual notice publication date.
- Keep copies of the complete submission and evidence of delivery to the public entity.
What remains to be confirmed
The government’s official procedure and annex are needed to confirm the formal title, commencement and disruption dates, the precise threshold and cap mathematics, the calculation formula, exclusions, application window and termination-notice mechanism. Until those documents are available, the provisions above should be described as reported by OnlineKhabar and Ratopati, not as a definitive legal interpretation.
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