Construction cost has shot up again, thanks to 15 per cent hike in the transportation cost of raw materials.
The construction industry has been reeling under a steep hike in the prices of raw materials since the last one year. The 15 per cent hike came into effect in the first week of October following the rise in the diesel price. Though transporters had sought a 20 per cent hike in the transportation cost, builders, developers and other major stakeholders agreed for a 15 per cent hike, sources in the construction industry told The Hindu.
As a result, the prices of construction aggregate (jalli), bricks and sand have seen a rise. While the cost of a load of coarse sand which was around Rs. 22,000 here, has gone up to Rs. 25,000, the cost of a load of fine sand has gone up from around Rs. 25,000 to Rs. 28,000. Similarly, the price of good quality table-moulded brick has gone up from Rs. 6.50 per piece to Rs. 7.50. The cost of construction aggregates has gone up between Rs. 2 and Rs. 5 per cubic feet, depending on the size of the aggregate. “The rise in the transportation cost will affect the construction industry as the material costs have increased by about 20 per cent during the last year,” said M. Ramesh, vice-chairman of the Builders’ Association of India, Bangalore chapter. He said the cost per square of construction, which crossed Rs. 1.5 lakh (for moderate construction) in the recent months, would further go up. “The cost per square of construction using high quality materials will now exceed Rs. 2 lakh,” he added.
The cost of construction aggregates, he pointed out, had already increased as transportation from places in Tamil Nadu, bordering Karnataka, had been stopped.
President of the All-India Motor Transport Congress G.R. Shanmugappa defended the hike and said they were forced to take the step in view of the steep hike in the diesel price. He said that they had demanded 20 per cent hike, but settled for 15 per cent which was accepted by the industry.