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Realty, infra cos sore as cement surges

V Rishi Kumar Hyderabad | Updated on January 15, 2018 Published on April 17, 2017

The Confederation of Real Estate Developers’ Associations of India (CREDAI), President and Chairman JAC, S Ram Reddy (third from left) with others at the press conferencein Hyderabad on Monday. - NAGARA GOPAL

Form JAC, seek govt intervention, consider import options

Real estate developers and construction and infrastructure companies are in a quandary over the sudden spurt in cement prices. Cement is now selling at ₹380-400 a bag against ₹230-260 two weeks ago.

Apart from seeking the intervention of the Centre and State governments to rein in cement manufacturers and regulate prices, realty and infra developers are exploring the import option.

Cheaper import

The landed cost of cement from Iran and South Korea works out to ₹100 per bag. Taxes and transport cost will push up the price to ₹200- 220 a bag, said representatives of the joint action committee, formed to address the cascading impact of spiralling cement prices on the construction sector.

Members of Credai chapter, Telangana Real Estate Developers’ Association, Builders Association of India, Telangana Builders Federation, and Telangana Developers Association have come together to form the JAC to oppose what they described as steep and unjustified hike in prices by cement manufacturers.

‘No justification’

S Ram Reddy, president of Credai, said, “There is no justification for such a steep hike. A normal 5-7 per cent hike is understandable, but this is a massive 60 per cent price increase. This will be detrimental to the interests of both builders and end consumers, and impact ongoing projects.”

He said the developers had faced a similar situation in 2014. However, following the intervention of Chief Minister K Chandrasekhar Rao, cement companies agreed to bring down the prices. P Ramakrishna Rao, general secretary, Credai, said, “Expert advice is being sought to consider imports. While no decision has yet been taken on the move, we believe this could be one of the options for us to consider.”

Govt intervention sought

Referring to the cartelisation of cement manufacturers, which has been challenged in the Supreme Court, P Ravinder Rao, president of Treda, said, “Since the matter is under consideration, and likely to come up next month, we are not considering legal recourse. We hope the government will intervene and resolve the issue.”

“A price spike of 60 per cent is unprecedented and will result in a cascading impact on the builders, end consumers and even in the government driven housing projects and the construction and infrastructure sector,” said SN Reddy, Vice-President, BAI.

Plans to meet PM

“We are seeking an appointment with Prime Minister Narendra Modi to take up the issue,” he said.

Andhra Pradesh and Telangana with 20 manufacturers account for about 26 per cent of the country’s total installed cement capacity.

Apart from impacting ongoing projects, the price increase can derail the affordable housing drive, they said.

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Published on April 17, 2017
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