Construction sector in Kerala heading to crisis with galloping price rise

Small-scale contractors face hurdles to complete previously signed works

November 10, 2022 06:15 pm | Updated 06:31 pm IST - Kozhikode

With the hike in price of cement, the cost of plastering is expected to come as an extra burden for both small-scale and large-scale construction projects.

With the hike in price of cement, the cost of plastering is expected to come as an extra burden for both small-scale and large-scale construction projects. | Photo Credit: K. Ragesh

The increasing prices of essential construction materials, including cement and steel, are dragging hundreds of small-scale contractors into crisis. A bag of cement, which was available at ₹420 four months ago, is now sold at ₹490 or above. For steel, the price has shot up to ₹20,000 a tonne within a few months.

Along with cement and steel, the price of quarry products is also on the rise without any apparent controlling mechanism. With the fluctuating prices, the construction industry appears to witness the direct impact. The square feet rate for building construction has already been revised by small-scale and large-scale contractors aimed at cutting losses.

“Many small-scale contractors who took up projects at a reduced rate are now shocked to see the sudden rise in the prices of construction materials. Only perhaps those who have previously stocked the materials will be able to manage the situation,” says Jobin George, a contractor. He says house owners may not be willing to revise the agreements with contractors in line with the fluctuating market prices.

The average square feet rate for house construction that stood between ₹1,800 to ₹2,200 has started changing across the State due to the impact of the changing market conditions. According to some whole-sale dealers, the price is likely to go up again with possible decline in production and supply.

Till recently, the price of cement bricks was below ₹29 apiece. It is now being sold at ₹32 or more based on the quality. For cement door frame, one has to spend about ₹1,100 apiece. Earlier, it was below ₹900. The rate has also gone up for cement window frames. The starting price is now ₹2,400 for two frames.

“All cement products have witnessed a price hike. Those planning to purchase cement products may have to go for a re-think,” says K. Rahul, a wholesale trader from Edakkad in Kozhikode. He points out that the price of quarry products such as plastering sand is also showing an upward trend.

Prices of PVC items, electrical materials and tiles are also showing an increase. Traders say they have witnessed a 15% to 30% hike in the price of such items within a short span of time. Also, hoarding is at its peak, they say.

Functionaries of the Licensed Engineers and Supervisors Federation (LENSFED) who have staged protests across Kerala raising the issue allege that the State government is yet to make any favourable intervention in controlling the price hike.

Federation president P.S. Judeson and secretary N. Ajith Kuma say the protests will be intensified. Public sector undertakings such as Malabar Cement is yet to wake up to the situation and compete with the other monopolies in the sector by increasing production at affordable rates, they point out.

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