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Flat buyers in a bind as cement, sand prices go up

By K. Ramachandran

CHENNAI Nov. 18. Cement prices in Tamil Nadu have shot up by nearly Rs. 40 a bag. Simultaneously, continuing scarcity has pushed up construction sand price by Rs. 5-8 a cubic feet.

This trend, along with the rise in steel prices, is forcing real estate builders and project contractors to hike their bills by about Rs.70 a sqft., say industry representatives. The industry is looking forward to an early resolution of the litigation over the government takeover of all sand-mining quarries.

Rationalising the cement price hike, industry sources say that last month it went down to an unsustainable level of Rs. 102 a bag. For one week, both cement and sand became scarce and now, apparently market forces have simply lifted the price to Rs. 140 or more.

However, these developments have a positive fallout: the builders and project contractors are considering seriously the use of quarry dust and fly ash as filler materials. This may augur well for water systems, which have so long been plundered in the name of sand mining, says N. Sairam, a former chairman of the Builders Association of India (southern region).

The BAI-SR's present chairman, J.R. Sethuramalingam, hopes that the Government will heed the association plea for doing away with the system of moving sand from quarries to designated depots. ``The Revenue department can sell sand directly from the quarries. It will prevent delays at depots.'' Also, the Government should allow use of trucks, which can carry 300 cubic feet, against the present limit of 200-cft load a truck.

A realtor from West Mambalam here says steel prices have gone up by 30 per cent in the past six months and sand prices from Rs. 12 to 20 per cft for bulk purchasers such as builders and project contractors. The rate is Rs. 23 or 24 if sand is purchased in smaller quantities directly by individuals.

With the Bureau of Indian Standards coming up with new codes to upgrade the earthquake - resistance capability of structures, the Chennai Corporation is insisting on bigger size columns and beams, say the builders.

This means increased use of steel and concrete in buildings. As a result, the cost has gone up another notch.

R. Radhakrishnan, another builder, says all these have led to an increase of Rs. 70 per sqft. in construction cost. ``As builders, we can only shift the burden to the hapless buyer in private contracts.'' But government contractors are feeling the pinch. A contractor, for example, is asking for Rs. 100 more per ctft. of concrete mix.

Kumar, a developer, says the entire region is stabler than is being projected. Even if stronger columns are required, one can always make indications in plans, but commit violations in reality. ``There is no way of ensuring that proper standards are followed by the builders when they build a house or flat.'' Also, he notes, once the cement price exceeds Rs. 135 a bag, it will attract a five per cent re-sale tax, another increase in the overall cost.

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