The construction sector has been crippled for nearly two years now for a variety of reasons, including cartelisation by cement companies raising the price and a steep increase in the price of steel, Builders’ Association of India national president A. Puhazhendi has said. Demonetisation and lack of uniformity in GST applicability and some State governments calling for tenders without making monetary provision are also among the reasons for contractors getting caught in a financial crisis.
Speaking to reporters ahead of the BAI’s two-day managing committee and general council meeting here on Friday, he said in spite of the National Company Law Appellate Tribunal order of ₹6,700 crore penalty, cement companies continued to sell at ₹300 to ₹350 a bag in Andhra Pradesh and Tamil Nadu though the actual production cost would not be beyond ₹220 with a 30% profit margin. He wanted the companies to stabilise the price for at least six months so that contractors could complete the work on the agreements reached with a certain price. Similarly, for no valid reason steel prices had gone up by 34%.
Mr. Puhazhendi said the issue had been represented to the Minister concerned stating that it would affect five crore workers and four to five lakh engineers affecting their livelihood. The GST at the rate of 18% for contract agreement should be made a uniform 12% along with other categories, the BAI president demanded.
‘Not paying bills’
The State governments in Andhra Pradesh, Telangana and Puducherry were calling for tenders for projects without earmarking funds and not paying bills for two to three years after contractors completed work with their money or by borrowing from banks.
This was leading to a difficult situation with pressure from banks, he said.
He demanded a rescue package for such contractors as well as apartment builders as the sale had plummeted for reasons beyond the control of builders.
Internship
EPF contribution responsibility should be taken by EPF that had a wide network, Mr. Puhazhendi demanded. On the lines of medicos, internship in engineering should also be made mandatory, he urged.
Earlier, Government Whip P.G.V.R. Naidu inaugurated the two-day expo. VUDA Vice-Chairman P. Basanth Kumar was present.
