The rising prices of cement and steel are threatening to derail the efforts of private developers to get their business back on track. According to sources, around 90% of residential projects in the State are being developed by private players.
Cement and steel account for 70% of construction cost of a project and to deal with any increase in prices of these two raw materials, developers will either have to raise the cost of the houses by around 20% or halt projects, they say. They have sought a mechanism to control cartelisation in the cement and steel industries.
According to sources, private developers have around 10,000 ongoing housing projects in Gujarat, of which 75% fall in the affordable category. The ratio is the same for Ahmedabad. Various construction and developer organisations have requested the government to appoint a ‘Cement Regulatory Authority’ to control cartelisation among cement and steel manufacturers.
Ashish Patel, president of CREDAI-GUJARAT (Confederation of Real Estate Developers Association of India-Gujarat), told Mirror, “There are six big cement manufacturers in Gujarat that are selling cement at a much higher price to us compared to other states. How is it possible? This is clear cartelisation which the government needs to control immediately.”
He added, “To achieve PM Modi’s goal of ‘Housing for All’ by 2022 the government will have to take extraordinary decisions. Else, we will have to increase the property price or stop the work as we can’t afford the cost.”
As a sign of protest, five organisations— Gujarat Contractors Association (GCA), Builders’ Association of India – Gujarat State (BAI), Credai Gujarat Credai- Ahmedabad GIHED and Association of Consulting Civil Engineers(India) – Ahmedabad – Gujarat (ACCE)— will jointly o b s e rve one-day nationwide strike on February 12 demanding that the government form regulatory authority for cement and steel. They also plan to give a memorandum to the collector for the same. Kirti Thacker, BAI (Gujarat) chairman, said “How will we manage to give the desired output when the material prices are so exorbitant?”
