Update: Nepal Says Earthquake Rebuilding to Exceed $10B, Will Take Years

By and | April 28, 2015

The cost to rebuild Nepal after its most devastating earthquake in eight decades will exceed $10 billion and take years, Finance Minister Ram S. Mahat said.

The death toll from the 7.8 magnitude temblor on April 25 has already exceeded 4,300 and could climb beyond 6,000, Mahat said in an interview on Tuesday. The government is struggling to save those who may still be trapped, he said.

“We have reason to believe that there are survivors in the rubble but we don’t have equipment to deal with the situation,” Mahat said at his office in the capital of Kathmandu. “In Kathmandu Valley itself, big buildings have collapsed and they don’t know how to get people out.”

The reconstruction figure is equivalent to about half of Nepal’s $20 billion economy, which is smaller than all 50 U.S. states. An exact estimate of the damage is very difficult to calculate, and the government will appeal to the world for help when the immediate rescue effort ends, Mahat said.

“The cost is incalculable,” he said. “It will be billions and billions of dollars in reconstruction and restoration of infrastructure.”

Makeshift tents have popped up across Kathmandu, where orange and blue tarps hung on hundreds of buildings at risk of collapse. Residents wary to go back indoors have started to become restless as they wait for food, water and medicine.

‘Grossly Inadequate’

Mahat said the government is overwhelmed and can’t provide proper relief for the 28 million people in Nepal, a Himalayan nation where many areas are hard to reach on the best of days.

“Some relief we are providing but it is grossly inadequate in relation to the need,” Mahat said. “This was completely unexpected and the scale of devastation was unimaginable.”

He welcomed support from around the globe, including neighbors India and China. In a couple of days, the finance ministry plans to make cost estimates for the relief effort and ask the international community for support.

“It will be multilateral, bilateral and all possible sources,” he said.

Nepal’s economy was already slowing before the earthquake struck. The Asian Development Bank had forecast Nepal’s growth for the year ending July 15 at 4.6 percent, down from 5.2 percent the year before due to a poor monsoon and political wrangling. Mahat said it was too early to estimate the immediate economic impact from the quake.

Kathmandu and the valley area around it account for a third of the nation’s economic activity, according to an estimate by Nepal’s central bank. Other major drivers include agriculture, remittances and tourism, which may suffer after at least 18 people died at Mount Everest base camp.

“Our priority is search and rescue and bringing the injured to safe places for treatment,” Mahat said. “Time is running out.”

Related article:
Nepal Earthquake Losses Could Top $2 Billion; Sparce Insurance Coverage

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