The Hindu Business Line : No bidders for TN Govt’s cement tender

Chennai, Aug. 3 Cement manufacturers have not responded to the Tamil Nadu Government’s tender floated for the supply of nine lakh tonnes of cement for development programmes, according to sources.

The tender floated by the Rural Development Department is being kept open for an additional fortnight up to August 13 because there have been no bidders.

The reason is a supply crunch in the face of continued demand for cement, the sources said.

Also, suppliers are discouraged by the bid for OPC (Ordinary Portland Cement) Grade 43 for construction work that could well be met by fly ash-blended cement (Portland Pozzolona Cement).

The demand for such a large quantity of OPC would aggravate market shortage, the sources said.

Cement manufacturers who are stretched to capacity make blended cement to meet the demand, by blending with fly ash up to 30 per cent.

Using OPC where blended cement will do would mean an unnecessary reduction of about 2-3 lakh tonnes of cement in the market.

The installed capacity in the four Southern States is about 52 million tonnes a year out of the total of 168 million tonnes across the country; almost all mills are working to capacity. But demand, which is growing at about 10 per cent a year, continues to outstrip supply, the sources said.

The Rural Development Department needs over 16 lakh tonnes of cement this year for constructing houses, schools and community buildings under the tsunami rehabilitation programme.

The State-run Tamil Nadu Cement Corporation (Tancem) is to supply seven lakh tonnes, with the rest to come from market supply.

Over the last few weeks the Tamil Nadu Government has called cement manufacturers for discussions on cement pricing and supply. Recently, it had even said that it would opt for direct imports of cement.

Industry representatives had pointed out that cement pricing was a function of the market, according to the sources. Manufacturers were helpless in controlling cement prices.

They had recently tried to stabilise prices but retailers were taking advantage of the heavy demand to hike prices and expand their own margins.