Industry running into the sand

CHENNAI, NOV. 1. The construction industry in Tamil Nadu, particularly Chennai, is in the doldrums.

The administration has failed to auction sand quarries around the city for over three months now. So, quarrying today is under the control of a `mafia' which charges builders and contractors anywhere between Rs.15 and 20 a cubic ft, against the normal price of Rs.6. Unfortunately, cement prices have also started to climb alarmingly again.

The construction industry's cup of woes is full, with the Government not being able to pay contractors' bills worth hundreds of crores. Hence, government projects have come to a standstill. All this amid the continuing real estate slump.

The Builders Association of India (BAI) has expressed serious concern over these developments. Its president, Mr. V. Ramachandran, says the auction (concession) period for the sand quarries around Chennai ended a few months ago, but they were not reauctioned, leading to a huge rise in sand prices.

Mr.R. Radhakrishnan, a former BAI president, and Mr.N.Sairam, another leading builder, note that Chennai alone required about 2000 truckloads of sand everyday for construction work. This came from the quarries in the Palar and Korataliyar river beds.

Kancheepuram district's Palar basin has quarries at Nerumbur, Puduppalayam and Ayapakkam, where the concession period ended three months ago and no new auction has taken place. A similar situation prevails in Thiruvallur district, where quarries lie at Vellavedu, Puduchattiram, Nagari, Chettakadu and Mettukandigai.

At Pandur in Kancheepuram district, villagers, allegedly at the instigation of a political party, have stopped the sand quarrying activity, claiming that roads have been damaged by trucks.

``Thus, we are unable to find good quality construction sand and most of the sand coming into Chennai today is illegally quarried from the river beds under the control of goon squads. Otherwise, we get sand from Panruti and Chidambaram,'' the builders note.

All this has jacked up the price of sand from Rs.2,000 to over Rs.5,000 a truckload, more expensive than even blue metal.

On the cement price hike, Mr. Radhakrishnan says that while the Government is to be complimented on steps which brought down the price from Rs.180 to Rs.105 a bag, it has risen again. At bulk rate, it is sold at Rs.155 a bag, ``that too in the lean rainy season...There is no reason for such a hike. It looks like the manufacturer cartels have reduced the production to create an artificial scarcity''.

Amid all this is the still bigger problem - the Government's inability to pay contractors' bills. Leading builders claim that whether it is road, highways, bridge, water supply projects or building projects, each of them has worked up bills of Rs.2 crores to Rs.10 crores. But no payment has been made for the past three months. Major road and bridge projects launched by the previous regime have come to a standstill for non-payment. The situation has also affected the cash flow among the contractors. ``Even for a completed dam project in Theni, the payment has not been made... What do we do for funds flow?,''asks a leading builder.

The only silver lining seems to be that the sand quarry auctions might take place in a few weeks.

Recommended for you