Move to hike cement prices to hit real estate projects
Cement manufacturers move to hike cement prices has been condemned by real estate developers associations. The associations have asked for a roll back of hike in cement prices. Various real estate developers associations such as Confederation of Real Estate Developers’ Associations of India (CREDAI) along with Telangana Real Estate Developers' Association (TREDA), Builders Association of India (BAI), Telangana Builders Federation (TBF) and Telangana Developers Association (TDA) have come together to form a Joint Action Committee (JAC) to oppose the steep hike of cement price by approximately 60% by the cement manufacturers when there is no increase in the prices of the raw materials, reports EPC World, India’s premier magazine for construction, infrastructure and power industry. The associations feel that this unprecedented move will act as a negative catalyst and will increase home prices and impact the delivery to home buyers.
The JAC which is represented by more than 600 strong real estate developers community and more 1000 small, medium and mega contractors unanimously demanded the cement manufacturers to roll back the unjustified steep hike in cement prices immediately.
Andhra Pradesh & Telangana house most of the country’s top 10 cement manufacturer’s plants in India. These states contribute about 26% of the total installed cement capacity of the country. The two states are home for 20 cement manufacturers. The annual consumption of cement in Telangana and AP is approximately 22-24 million tonnes. Sales dispatches for March 2017 were approximately 2.15 million tonnes. This price hike will create extra burden on consumers who will have to bear the burden of heightened costs and escalations and delays in construction and deliverability of housing schemes and projects.
Speaking to EPC World, S Ram Reddy, President CREDAI Hyderabad & Chairman JAC said “The housing sector accounts for a significant consumption of the total cement demand in India. We cannot be cornered by the cartel of cement manufacturers with a steep hike of approximately 60% without any changes in the input cost, demand or government taxes. We vehemently oppose this unilateral move by the cement manufacturers and all the members of CREDAI Hyderabad and CREDAI Telangana, TREDA, BAI, TDA and TBF will take strong steps and oppose the action. We demand the cement manufacturers to roll back the hike in price immediately and the Government of Telangana State to intervene to influence the roll back in cement prices”.
G Ram Reddy, President CREDAI Telangana & Convener JAC explained further that “The focus of the developers in the region is on affordable housing. The steep increase in the price of cement in Telangana will add to the cost of housing and thereby increasing the burden on all stakeholders. Considering the current low prices for property, this increased cost will create negative growth and escalate artificial pricing. To avoid such a situation, we are insisting on an immediate roll back of the price hike.”
Adding to this P Ramakrishna Rao, General Secretary CREDAI Hyderabad & General Secretary Secretary JAC said that “The move by the cement manufacturers to increase the price of cement in Telangana by approximately 60% is unjustified as there is no change in taxes or any significant increase in the cost of inputs for cement. Moreover the states of Telangana & Andhra Pradesh are rich in Limestone and mica deposits providing the cement manufacturers a strategic advantage and cost benefit. So far both the states had an advantage over the other states in India in terms of cost. In Telangana there is no increase in power tariff, thereby offering no justified reason for the sudden price hike. We demand an immediate roll back of price hike for cement in Telangana and urge the Government to intervene and resolve the issue.”
P. Ravinder Rao, President, TREDA and co-convener JAC added “The developers and builders in Telangana are committed to provide affordable housing. The hike in cement prices will have a negative multiplier effect on the economy. All the real estate players strongly oppose this decision and urge the governments at the centre and the state to take immediate steps for intervention.”
G V Rao, President-Telangana Developers Association & co-convener JAC added that “We have a task to support the Government in the mission to provide Housing for All in Telangana; such unprecedented hike in cost of cements will hamper the process and add to the costs.”
C Prabhakar Rao, President-Telangana Builders Federation & co-convener JAC added that “ This unexplained hike in cost of cement which is the basic raw material required in all constructions will have a significant impact in derailing the plans and add to the costs. We request the Government at centre and state to stop the cartelization by cement manufacturers and rationalize the price for cement.”
Adding to this S. N. Reddy, Vice President,BAI and co-convener JAC said “The move by the cement manufacturers in Telangana is most unfortunate as they get the benefits of the government policies but are using the need for rapid infrastructure development for their vested interests by increasing the price for cement.“
The Joint action Committee reiterated that it is determined to take the cement price hike head on and will take all appropriate measures to ensure that the cartelization is broken. JAC has vowed to bring an end to monopolistic practices initiated by the cement manufacturers association.
By EPC World Media Group