The Hindu Business Line : Hike in steel prices: Builders threaten to stop purchase

The builder-contractor associations of Karnataka have served this ultimatum in the wake of what they claimed a phenomenal 45.8 per cent increase in the steel prices in the last eight months and felt that unless the Government intervened and reduced the price, the industry would face a severe setback.

Addressing media persons here, representatives of the Karnataka State Contractors' Association (KSCA), Builders' Association of India (BAI) and Karnataka Ownership Apartment Promoters' Association (KOAPA) said the current price of Rs 22,000 per tonne was quite high. The industry feared that a hike was in the offing and this would push prices to Rs 27,000 per tonne. This would cripple the construction industry, the associations said. Riding on the crest of the ITES wave and increasing demand for housing projects, work on about 20 million sq ft of space was in progress in Bangalore alone, Mr K. Subramani, Vice-Chairman Builders' Association of India (Karnataka), and Mr S. Suresh Hari, Honorary Secretary, KOAPA, said.

While arguing for a price reduction, the associations also wanted the Government to reduce import duty on steel for the construction industry from the compounded level of 45 per cent. The industry's imports, which was 35 tonne in 2001, has come down to seven tonne this year.

The associations also pointed out that the price of 22,000 per tonne was higher than the scheduled rate of 16,000 per tonne quoted for tenders floated by the PWD, Bangalore Development Authority and the Bangalore City Corporation.

"If a contactor quotes Rs 2,000, his tender will be rejected as per the tender clause," Mr Subramani said.

The abnormal price hike would have a severe impact on the construction cost, which over a period had stabilised at Rs 550 to Rs 650 per sq. ft, he added.

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