The Hindu Business Line : Construction sector to go on strike against price hike in cement, steel

THREE real estate developer associations have called for a nation-wide strike on March 15 this year, in protest against the recent hike in cement and steel prices; they have also demanded that the Government reduce import duty on these items.

All building activity as well as purchase of cement and steel will be called to a halt that day, announced representatives of the three associations, at a news conference here on Thursday. The three bodies were the Confederation of Real Estate Developers Association of India (CREDAI), the Maharashtra Chamber of Housing Industry (MCHI) and Builders Association of India (BAI).

This increase will affect real estate across the country, said Mr Kumar Gera, President, CREDAI.

The associations also claimed they have an alternative in hand. The construction industry has started dialogues with China, Indonesia and Korea for import of steel and cement, as it would be cheaper than buying from Indian suppliers, said a joint statement.

The price of cement has risen from Rs 95 a bag to Rs 160 a bag over the last three or four months; and the price of steel from Rs 19,500 a tonne to Rs 28,000 a tonne in the last two or three months. This overall rise of 50 per cent in prices of both cement and steel, said the builders, is unnatural, though a moderate price increase might have been in order.

The obvious conclusion to be drawn is the existence of an informal pricing arrangement mechanism among steel producers, said a statement from the associations.

When a tender is filed today the builder takes into account price rise of the last one year, but how does one take into account such an unforeseen price rise, asked Mr D.L. Desai, Hon. General Secretary, BAI.

According to the builders, market indications suggest that in a very short time, the price is likely to increase by up to 100 per cent from the base levels.

Steel and cement account for 33 per cent of construction costs; every 50 per cent escalation of price of these materials would increase the cost of real estate by Rs 75 to Rs 100 per square foot, the average cost of freshly developed real estate ending up 8 per cent to 10 per cent higher from original estimates.

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