T. Ramakrishnan

Negotiations are on with lowest price bidder, says official

CHENNAI: The State Government is likely to clinch the cement import deal in 10 days.

Negotiations are on with the bidder who has quoted the lowest price for importing cement to bring down the cost, according to an official in the Industries Department.

Responding to concerns expressed by several sections, including the construction industry, on the escalating cost of cement, the Government, after obtaining clearance from the Centre, had entrusted the Cements Corporation to import cement.

At the rate of 1.5 lakh tonnes a month, the State has been permitted to import 1.8 million tonnes. In early September, the Corporation invited bids. After scrutiny three companies, from China, Indonesia and Pakistan, were shortlisted.

Asked what would be the price per bag under the deal, the official said the Government was trying to ensure that it was much lower than Rs.230 a bag.

To another query on making available the imported cement to the retail market, the official said this would depend on the quantity and price at which the material was procured. Essentially, the Corporation would supply it to government departments undertaking major infrastructure works.

For several months, the rising price of inputs such as cement have remained an area of concern to several departments, including Highways, Public Works and Municipal Administration and Water Supply.

The departments had to invite several rounds of tenders and, in many instances, found the prices quoted were 40-50 per cent higher than the estimates. Senior officials said they had taken care to see that major works did not suffer on account of this problem.

Transitional phase

Noting that the problem was plaguing other States too, a Finance Department official explained that this was a transitional phase in the wake of the boom in every segment of the economy and consequent increase in demand.

Giving an instance of the ongoing programme of laying underground sewer lines in all district headquarters, he said the market would not suddenly throw up new executing agencies for this purpose and authorities would have to get the work done only from the available players.

Asked whether the schedule of rates for building materials was likely to be revised, the official replied that the Government’s practice was to do it annually, in April. Under the present schedule, the price fixed for cement was Rs.215 a bag. The authority accepting the tender was empowered to clear bids quoting a reasonable price with reference to the prevailing market rate. The Boards of Engineers of the Public Works and Highways departments were examining the issue of automatic indexing of price escalation of inputs in the overall scheme of cost determination.