BAI also warned if early action is not taken, Contractors will be forced to close down their works as they are getting ruined in both the eventualities. The apex bodies of the construction industry have joined hands to voice their concerns from a common platform against the continuous hike in steel and other steel items mainly used in the construction and infrastructure projects.
The construction industry fears that if corrective steps are not taken immediately by the works authorities, such as NHAI, DDA, PWD’s, Railways and CPWD, then the virus of non-tendering may spread across the country.
The construction industry demands permission of duty free imports of steel like cement, ban on export of steel, reimbursement of the increased steel price based on SAIL rates published from time to time for ongoing and upcoming projects, request to Director General of Intelligence and Research to enquire into the causes of unprecedented steel price increase from 2004 till March 2008 and more specifically after the Union Budget 2008 and stability in steel prices.
The BAI demanded the Government to probe into the steep hike in the cost of steel and its scarcity hampering the construction activity as the industry is finding it difficult to absorb this unabated increase. The price has moved from Rs 34,000 per metric tonne (MT) in December 2007 to Rs 45,000 per MT in March 2008, an increase of more than 32 per cent. Meanwhile, the steel rates have gone up by about 80 per cent as compared to the rates prevalent in 2005.
In a meeting convened by BAI and attended by representatives of Confederation of Real Estate Developers Association (CREDAI), Construction Federation of India (CFI), Construction Industry Development Council (CIDC), MES Builders’ Association of India (MESBAI), National Highway Builders Federation (NHBF) and National Real Estate Development Council (NAREDCO), it was pointed out that the steel companies are arbitrarily jacking up the prices.
At the press meet, BAI Spokesman said that ‘’the Steel Secretary has already confirmed 25 per cent increase in steel prices during the last three months.’’
He also mentioned that the contractors executing important and major projects for the Central Public Works Department (CPWD) and for the Commonwealth Games 2010 and other projects will be forced to close the works.
The apex body complains that main producers SAIL, TATA and RINL and other secondary producers are continuously increasing the rates without any reasons and justification. The Ministry of Steel and the Government is not heeding to the sufferings of the steel consumers. ‘’The contractor agencies who have committed their rates through respective agreements and time bound projects, are ruined and are not in a position to face and absorb this sharp increase’’, the spokesman added.
Despite all these hikes the steel is in short supply and all the works of National importance are suffering badly. The construction cost has gone up more than 15 per cent in the recent past and thus building a shelter by ‘’AAM ADMI’’ has become a matter of dream, he said.
The spokesman also mentioned that the concerned Ministry is neither putting pressure on the manufacturers to arrest the prices and to increase the production of steel in the country to meet the demand nor it is changing the policy of Import/Export as per demands of the present situation. ‘’It seems there is a sort of cartelization by the steel manufacturers which is a major cause of unprecedented increase in the steel prices,’’ he said.
Keeping in view the gravity of the situation, the industry urged the Government to take up the matter on war footing to avoid delay in completion of the projects and foreclosure of works by contractors and litigation etc.
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