Building blues

Representatives of the construction industry, holding out for a rollback in cement prices, plan to stop purchasing cement from manufacturers from June 30

June 26, 2014 02:12 am | Updated October 18, 2016 02:38 pm IST - CHENNAI:

All forms of construction work in the city, including massive infrastructure schemes of both the Central and State governments, are likely to come to a halt 10 days from now if the steep hike in cement prices is not rolled back, representatives of the construction industry have cautioned.

Representatives here said that, along with the Builders Association of India and other flat promoters’ associations across the city, they would stop purchasing cement from manufacturers from Monday, as a first step.

The extraordinary increase in the price of cement, they said, was a fallout of the cartelisation of the cement industry. Neither the Centre nor State government was able to break the cartel. Rising prices would only be passed on to the consumer, and at this rate, would put housing out of the reach of the salaried group, they said.

According to them, the only solutions were to create a regulatory authority and waive import duty for cement.

Speaking to mediapersons here, Ajit Kumar Chordia, president, Chennai Region of the Confederation of Real Estate Developers Association of India (CREDAI), said the steep hike in the prices of construction material, particularly of cement, given the Centre’s agenda to create new cities, was shocking, “a bolt from the blue”.

Industry representatives said that if the cement price was not rolled back, all stakeholders of the industry — builders and contractors — would be forced to resort to ‘stop work’ from July 7. “We want to draw the attention of the government to the serious consequences the cement price hike will have,” Mr. Chordia said, adding that the most crucial impact would be a steep hike in the average cost of construction per square foot.

Suresh Krishn, the association’s treasurer, said a bag of cement in Pakistan now cost only about Rs. 175 but when imported, with a VAT of 14 per cent and import duty of 16 per cent, it was very expensive.

“If there is a complete waiver on import duty, we can import cement at a price much less than the prevailing rate here, which is between Rs. 290 and Rs. 320 per bag,” he said. Speeding up certification by the Bureau of Indian Standards of cement imported from Pakistan or other countries would ease the situation, he said.

CREDAI representatives reiterated the idea of forming a regulatory authority to keep a check on cement price and also to break the cartel of cement manufacturers.

In May 2013, manufacturers were pulled up by the Competition Appellate Tribunal on alleged charges of price-fixing and directed to pay Rs. 630 crore as penalty, imposed by Competition Commission of India.

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