Terming the sharp rise in the price of cement over the past couple of months as unprecedented, the Builders Association of India (BAI) has called upon the Centre to set up a statutory body to regulate the price of cement.
Alleging cartelisation among cement manufacturers, BAI contended that there was no justification for the price hike in the absence of any significant rise in cost of raw materials or taxes.
The price of cement has gone up to Rs.350 a bag from Rs.280-290 in the past two months. “The steep rise, especially in Tamil Nadu, is bizarre as the cement price is ruling much lower in Andhra Pradesh and other States. Even in Kerala, which gets most of its supplies from Tamil Nadu, the price is lower,” observed V. Rajagopal, BAI State Chairman, addressing a press conference here on Thursday.
Next to agriculture, the construction industry is the most labour intensive and he appealed for the Chief Minister’s intervention to protect the interests of the industry and the common people.
“Individual home builders, builders, engineers and even government contractors have been forced to stop construction owing to the rise in the price of cement,” said M. Sitharthan, chairman, BAI, Tiruchi. He alleged that the cement companies are trying to create an artificial demand by bringing down production.
He pointed out that the BAI had previously taken the matter to the Competition Commission of India which imposed a penalty of over Rs.6,000 crore on the cement manufacturers for indulging in cartelisation.
The manufacturers have gone on appeal to the Supreme Court. The attempt to create artificial demand should be prevented when the matter was pending before the court, he said.
BAI members contended that they could not pass on the burden to consumers. Builders normally make only five to ten per cent provision for cost escalation in their project cost, but the price of cement has risen by more than 25 per cent.
The price rise will also affect infrastructure development projects of the government, they said.
Urging the Centre and State government to take steps to bring down the price by holding talks with the manufacturers, BAI also called upon the Centre to set up a statutory body on the lines of SEBI and IRDA to regulate the price of cement.
Answering a query, Mr. Sitharthan said the procedure involved in getting cement through the Tamil Nadu Civil Supplies Corporation at regulated price of Rs.200 a bag was too cumbersome.
Expressing concern over the rise in the price of sand , Mr. Sitharthan said that the price has gone up to Rs.6,000 from Rs.5,000 for four units and urged the State government to take steps to bring down the price. BAI centres in respective districts could be allotted a sand quarry so that builders could get the raw material at a lower price, Mr. Rajagopal opined.
