The Hindu Business Line : AP Govt rules out cartelisation by cement cos, but favours probe

‘After a detailed study by our officers, the Government is satisfied and the charges that companies are forming a cartel to increase prices are baseless.’

Our Bureau

Hyderabad, April 25 Andhra Pradesh has ruled out cartelisation by the cement manufacturers in the State. It, however, has still recommended to the Centre to probe the hike in prices by the anti-monopoly watchdog MRTPC.

“There was a general impression that cement companies had reduced production, which was resulting in the recent increase in prices. But after a detailed study by our officers, the Government is satisfied and the charges that companies are forming a cartel to increase prices are baseless,” Mr K. Rosaiah, Finance Minister, Government of Andhra Pradesh, said after a meeting with the major and minor cement producers here on Friday.

He added that companies were producing between 98 and 99 per cent of their installed capacity, so there was no question of creating artificial scarcity.

The Minister also said that the companies have assured the Government to supply cement for the Indiramma Housing Programme as per the original agreement.

“They have agreed to supply cement at the same cost as last year which is between Rs 145 and Rs 160 a bag depending on the distance. The representatives of the companies have also agreed to have discussions with State Government officials to chalk out a programme to clear backlogs,” Mr Rosaiah told newsperons.

Cement companies had agreed to supply around 18.5 per cent of their production to the State’s housing schemes. But a Cabinet sub-committee, formed to look into the hike in prices, found that after a couple of months there was some slackness and a couple of companies were supplying between 10 and 10.5 per cent of their production capacity.

“Cement prices have come down considerably and are currently between Rs 195 and Rs 225 a bag, depending on the distance from the cement plant. Also the prices are high in districts bordering Karnataka and Tamil Nadu as the prices in these States is between Rs 250 and Rs 270 a bag; this has a huge impact,” Mr Rosaiah said.

He added that the companies have agreed to sell cement at between Rs 200-210 in the State, inclusive of transport charges.

As per Government data, cement production in the State is around 32 million tonnes and around 5 mt of capacity addition is in the pipeline.

“We have also informed them that from the time mining leases have been given, companies have to show considerable progress on the ground, else their lease will be cancelled,” Mr Rosaiah said.

More Stories on : Cement | Andhra Pradesh

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