The Hindu Business Line : Builders protest hike in steel prices; seek Govt intervention

Mr D.L. Desai (right), Senior Member, Builders Association of India, and Mr V.K. Garg, President, MES Builders Association of India, addressing a press conference in the Capital on Wednesday. —

Our Bureau

New Delhi, April 2

Reeling under the impact of surging steel prices, the apex bodies of construction industry under the aegis of Builders’ Association of India (BAI) on Wednesday sought Government intervention to rein-in steel price hike and warned that contractors executing key projects for the Central Public Works Department (CPWD) and for the Commonwealth Games may be forced to close the work if the situation did not change.

The industry, which has witnessed about 32 per cent increase in steel prices in the last three months, is demanding permission of duty free imports of steel, ban on export of steel and reimbursement of increased steel price based on SAIL rates published from time to time for ongoing and upcoming projects. Besides, the construction industry is asking the Government to set up a regulatory authority for the steel sector.

Withdraw from comex

The Builders’ Association of India (BAI) also asked for the withdrawal of steel from trading in commodity exchanges. The BAI Chairman, Mr Ralhan Lal Chand, told reporters that with all major steel producers having captive mines and with importing of the balance requirement of coking coal from Australia, Africa and other countries, input costs varied with each producer. “But still it is observed that selling prices of steel are by and large uniform despite each plant having different production cost. This leaves room for doubt that steel producers are acting in concert,” Mr Chand said.

Steady rise

Commenting on the impact of the rising steel price, the BAI General Treasurer, Mr D.L. Desai, said the average price has steadily increased from Rs 17,750 in July 2002, to Rs 35,000 per tonne in January 2008 and to Rs 48,500 a tonne in March 2008.

“The construction industry’s growth rate has slowed down to 9.6 per cent in the current fiscal from 16.5 per cent in 2005-06,” Mr Desai said, adding that the average profit of three major steel producers, Tata Steel, SAIL and RINL, however, have soared. BAI also expressed doubts about completion of projects connected with the Commonwealth Games - 2010 as the two recent tenders one for constructing a hostel-cum-media centre and another a wrestling stadium did not attract any bids.

The conference by the industry comes a day after the Government had said it expects steelmakers to reduce prices by 10-20 per cent within a month. Mr Desai said unless the Government took immediate measures, BAI would take to the streets and stage a token strike to press for its demands.

The representatives of Confederation of Real Estate Developers Association (CREDAI), Construction Federation of India (CFI), Construction Industry Development Council (CIDC), MES Builders Association of India (MESBAI), National Highway Builders Federation (NHBF) and National Real Estate Development Council (NAREDCO) were also present at the meeting.

More Stories on : Real Estate & Construction | Steel

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page