NE BUSINESS BUREAU
AHMEDABAD, FEB 11
Builders and related construction activity members of Gujarat will stop work for a day on Friday, February 12, as part of a nation-wide strike called for by the Builders’ Association of India (BAI). The main demands are measures to control steel, cement, diesel, and bitumen prices by setting up regulatory authorities for important raw materials – steel, cement and check cartelisation.
The Joint Action Committee of Gujarat – representing Builders Association of India, Gujarat Chapter organized with CREDAIGUJARAT (Confederation of Real Estate Developers Association of India- Gujarat), Gujarat Contractor Association, CREDAI AHMEDABAD GIHED (Gujarat Institute of Housing and Estate Developers), and Association of Consulting Civil Engineers (India) Ahmedabad Centre – has decided to submit a memorandum to the District Collector.
The price of steel has increased from nearly Rs 35,000 a tonne to Rs 60,000 and above a tonne in and the price of cement has gone up by almost Rs 75 to Rs 100 for a bag of 25 kg. With the diesel price increase, the cost of wires and pipes are also up, said Ashishbhai K Patel, President, CREDAI GUJARAT. This has resulted in construction costs escalating 25 % to 30 % per sq.ft here in the last few months but so far we have not passed on the same to the customers.
According to the organizers, work will come to a halt at 22,000 sites in Gujarat where over 20 lakh workers are engaged. It will be a paid holiday for them.
Ashishbhai K Patel said “Construction is one of the most important economic activities contributing maximum GDP Growth and accounts for more than 50% of total plan outlay. It has a forward and backward link with more than 250 allied industries. It employs more than 40 million workers and next only to agriculture in employment. To reap the huge demographic advantage of a young population of 600 Million by 2030, India needs to create huge housing in cities to accommodate the youngsters.
He said “Steel & Cement is one of the major construction materials used in all segments of Construction Industry namely, Housing (55% – 65%), Infrastructure (15% – 25%), Commercial and Industrial Construction (10% – 15%), and Industry (5% – 15%). There is no consumer other than Construction Industry for cement. Contractors by and large works on a fixed-rate fixed time basis, as such bear the brunt of higher Steel & cement price.”
He added that various bodies have requested the Government to appoint a ‘Cement Regulatory Authority’ to rein in the Cement Manufacturers’ cartelisation on the lines of regulatory Authorities like SEBI, TRAI, and IRDAI, etc.”
Thus, the price of construction shall definitely go up by 15% to 20% in the coming future and ultimately the dream of the prime minister to provide Housing for all by 2022 will not be completed despite series of tax regimes and planning. Also, the end-user will have to bear additional cost towards their unit.
Arvindbhai Patel, Chairman, Gujarat Contractors Association said “Due to hike in cement, steel and diesel & Bitumen prices, the public utility infrastructure projects fall in jeopardy. This will result in the loss of billions of public money.”
He further said, “The Govt has not fulfilled the assurance to reduce the performance bank guarantee from 5-10 % to 3 %”.
Giving details about the strike, Kirti M Thacker, State Chairman, Builder Association of India, Gujarat said, “The Cement and Steel companies have hiked the prices in the last one year by forming a cartel. Since last year, our industry has also observed phenomenal price hike in diesel, Bitumen, and other constructing materials. The cement companies have hiked 20 to 25 % prices followed by steel at 40 % resulting in the cascading effect to the construction industry.”
He further said “We and other allied bodies will observe one-day nationwide strike on 12th February with a demand to the Govt to form Cement Regulatory Authority. We will give our memorandum to the collector.”
Despite having five major cement companies in Gujarat, the price of a 25-kg cement bag is being sold over Rs 300 now which was Rs 230 in March 2020. Incidentally, these companies still maintain the rate of Rs 230 in neighbouring Rajasthan and far away Bihar after transportation. This shows the cartelisation led by UltraTech Cement, the major cement producer of the state, he alleged.
Seconding his demands, Ajaybhai Patel, President, CREDAI AHMEDABAD GIHED (Gujarat Institute of Housing and Estate Developers- CREDAI) said Cement Manufacturing companies in Gujarat sell cement at low prices in other states of the country while other costs besides transportation are not for sale in Gujarat. It is totally impractical and unreasonable to get cement in Gujarat at a higher price as compared to other states. The Government must take strict action against the companies producing cement in Gujarat.
Er Anand V Dave, President, Association of Consulting Civil Engineers (India) – Ahmedabad Centre – Gujarat said, “The statistical figures of cement and steel manufacturing companies show that the companies have not fully utilised their installed capacities and without any valid reason hiked the prices.”
