One machine associated with Nepal's development that has gained significant popularity in recent years is the dozer. However, as these heavy machines are sometimes misused, the development process itself has begun to be discredited in the name of "dozer development."

Countries in need of dozers have started looking to Nepal for supply. Recently, dozers have been exported from Nepal to South Asian countries like Afghanistan and Sri Lanka, as well as to Gulf nations such as Dubai.

Nepal does not manufacture heavy equipment, yet these machines have begun to be "exported" from the country. Following the Taliban's rise to power and the subsequent American economic embargo, heavy equipment has been moving from Nepal to Afghanistan.

Due to the high cost of new machines—often exceeding tens of millions in capital—Afghanistan and other nations have started legally importing heavy equipment from Nepal. All dozers from the Doosan company that entered Nepal have been exported after fulfilling the necessary legal requirements.

The pace of Nepal's own development remains slow, with just over one-sixth of the total budget allocated for development and construction. At the end of the fiscal year, the share of capital and development expenditure is notably low. In the fiscal year 2024/25, out of a budget of Rs 1.8 trillion, only Rs 352 billion have been allocated for capital and development expenses.

Looking back seven years, in the name of local development, dozers were actively used from the planes of the Terai to the slopes of the mountains. At that time, data showed that 13,666 dozers were used for road construction across the country, averaging 177 dozers per district. Now, however, many of those dozers are lying idle.

Contractors have expressed discouragement due to delays in payments for development work. Consequently, some heavy equipment dealers, who once had to sell at scrap value, are now surprised to receive better offers. Previously, dozers sold for around Rs 800,000 to Rs 900,000 to scrap vendors but they are fetching at least Rs 3 million from foreign buyers, prompting dozer dealers to start exporting them after completing the necessary processes.

"If old heavy equipment were sold here, they would only fetch scrap values," said Tara Bahadur Kunwar, former chairman of the Federation of Heavy Equipment Entrepreneurs' Associations of Nepal. "Due to the American blockade, foreign buyers are finding relief in acquiring them from Nepal."

Kunwar said that only one group is currently engaged in this export business. Companies located across the border purchase the dozers, paying the requisite taxes and customs duties. Afterward, the selling company applies for the deregistration process, completing the legal requirements as outlined in the Transport Management Procedures Directives, 2060.

How second-hand machines are sold abroad

The resale of heavy equipment, particularly dozers and loaders, purchased in Nepal is a relatively new issue. At the first glance, it may seem impossible to transport these machines abroad. However, completing the legal process involves transferring ownership from one company to another. If a company is operating abroad, it must fulfill legal requirements by specifying its intended use for the equipment.

All dozers in Nepal are registered under specific companies or crusher plants. When these companies struggle to secure contracts, they create documents claiming partnerships with foreign firms, often facilitated by a group of Indian nationals. After completing all necessary procedures, this group negotiates with dozer owners in Nepal.

So far, they have paid a maximum of Rs 3.5 million for each dozer, while sources indicate that these machines can be sold in foreign markets for around Rs 10 million. Dozers are typically transported from Nepal to Afghanistan via India and Bangladesh, with similar routes used for shipments to Sri Lanka and Dubai. Although there is no official data on the exact number of dozers exported in this manner, traders estimate that between 12,000 and 15,000 dozers have left Nepal.

Contractors leaving dozers abroad

Some Nepali construction businesses have secured contracts abroad and are permitted to take heavy equipment from Nepal. This process also requires legal documentation. Foreign companies that obtain contracts often bring necessary materials and equipment back with them.

In some instances, Nepali construction firms are left with equipment after completing various projects. Although these companies have purchased the required machines, they face challenges selling them at scrap prices after finishing their work. Business owners report that there are no tenders for large projects that would allow for the reuse of once-used equipment, forcing them to sell unused items at a loss. They complain that the government issues a major tender for development projects and then remains inactive for years, exacerbating the issue.

Some Nepali construction companies have sold heavy equipment acquired for foreign contracts, but such transactions often go unreported in Nepal. For example, in 2004, Sharma & Co. built a resort on an island in the Maldives, while Kalika Construction repaired roads in the US. Similarly, Tundi Construction built a road in Bhutan. Government officials speculate that other companies may not have returned equipment acquired from abroad or brought it back to Nepal.

Nepali companies face intense competition abroad and struggle to keep up with advancements in technology. Reports indicate that some firms are selling their offices and assets after completing contracts because they cannot compete with larger foreign companies.

Isn’t the registration canceled?

According to data from the past six years, a total of 11,762 units of heavy equipment are registered in Lalitpur. However, industry estimates suggest that around 90,000 dozers have been imported into Nepal over the years, with no effective monitoring of their usage. Government officials suspect that many dozers purchased by contractor companies and individuals are no longer operational, but precise figures on non-functional dozers are unavailable.

Srikant Yadav, an engineer at the Department of Transport Management (DoTM), said that a chassis number and model number are required to cancel the registration of a dozer or any vehicle. Only after verification by the department can the cancellation process begin. “No one can simply take a dozer out of Nepal without following the necessary legal procedures, which include clearing revenue and customs duties, and specifying its intended use abroad. Registration cancellation occurs only after completing all legal steps,” Yadav said.

Under Secretary Pabitra Kunwar, chief of the vehicle registration branch of the DoTM, said that he is unaware of any heavy equipment registrations being canceled for the purpose of exports. He said that registration is typically canceled only when the engine and chassis are no longer operational. Therefore, once canceled, that vehicle cannot be driven anywhere. However, it is possible to export it by paying customs duties, just as it is imported into Nepal.

There is no exact data available on the total number of dozers in Nepal, even from the regulatory body, the DoTM. It is estimated that there were 92,000 dozers by the end of the fiscal year 2021/22, an increase of 3,000 in the past four years. Tara Bahadur Kunwar, the outgoing chairman of the Federation, warned that the country cannot sustain the continued increase in dozer imports. "The government cannot provide work to contractors, and even when it does, payments are delayed. The companies operating heavy equipment are suffering," he said. Currently, it is claimed that there are about 16,000 dozers available for rent under the Federation.

Billions spent on the purchase of heavy equipment

Data shows that dozers and excavators worth more than Rs 10.5 billion were purchased in the 11 months of the fiscal year 2021/22. It is suspected that about 1,000 units of heavy equipment were imported in the last two years. Looking at it this way, Nepali money has been sent abroad to buy heavy equipment such as dozers, excavators and loaders.

After the local elections in 2074 BS (2017), the ward chairpersons started owning heavy equipment, with some exceptions. When the people's representatives decided to put their own people in the consumer committee and use dozers bought in the name of their own relatives to use the allocated budget from the ward, they started digging the hills haphazardly without any scientific study.

According to the data of the Department of Customs, the import of dozers and excavators was normal before the promulgation of the Constitution of Nepal, 2015. But after the implementation of federalism started along with the constitution, there has been an unnatural increase in the import of heavy equipment.

In the fiscal year 2014/15 before the promulgation of the constitution, bulldozers and excavators worth Rs 4.64 billion were imported, while in the fiscal year 2015/16, the year the constitution was promulgated, bulldozers and excavators worth Rs 9.845 billion were imported.

After the local level elections of 2017, Rs 18.228 billion was spent on the import of bulldozers and excavators in the fiscal year 2016/17. In the year of the first local elections under federalism, the highest number of dozers and excavators was imported. In the fiscal year 2017/18, Rs 29.95 billion was spent on the import of heavy equipment. According to the data of the Department of Customs, the following year, the import of dozers and excavators decreased by almost half.

In the fiscal year 2018/19, dozers and excavators worth Rs 15.05 billion were bought. There was a decline in heavy equipment import in the fiscal year 2019/ 20 due to various reasons. Lockdown started in Nepal from March 2020 due to the Coronavirus pandemic. Therefore, in the fiscal year 2020/21, heavy equipment worth Rs 8.3 billion were imported. In the fiscal year 2021/22, compared to the fiscal year 2020/21, the import of heavy equipment increased. In the fiscal year 2021/22, Rs 11.765 billion was spent on buying dozers and excavators.

As the country is in the stage of development, the government imposes only a 4 percent tax on the import of heavy equipment. Because of this, since the year of the local level elections i.e. fiscal year 2017/18 till now, dozers worth Rs 75.65 billion have been purchased. This figure does not include the Nepali rupees spent for importing other parts like its spare parts, buckets, lubricants and teeth. After the local elections of 2017, more than Rs 100 billion has been spent for the purchase of dozers and dozer accessories.

By Tapendra Karki