Alleging that a cartel of cement manufacturers has increased cement prices artificially, a group of civic body contractors has moved the Madras high court seeking government’s intervention in fixing cement prices.
The contractors contended that the cartel of private companies pushed up cement prices more than that of last year, adversely affecting the execution of various government projects. In their petition, the contractors also pointed out that among all south Indian states, the cement prices are the highest in Tamil Nadu.
A division bench of Justice M M Sundresh and Justice R Hemalatha issued notice to the authorities, returnable by four weeks.
According to the petition by A Ammasaiappan, treasurer of the Coimbatore Corporation Contractors Welfare Association, the public works department issues revised standard schedule of rates for cost of construction material every year, which are basic for the preparation of the estimate for every work.
The petitioner pointed out that in the beginning of 2019, a bag of cement was sold at Rs 340 a bag, which became Rs 385 in July 2019.
A comparative statement on the price of cement bags in July 2019 in Andhra Pradesh, Karnataka, Telengana and Tamil Nadu submitted by the petitioners showed that the price is higher by Rs 65 in Tamil Nadu than the other states.
“Cement manufacturers in Tamil Nadu have entered an agreement among themselves and without any reason, they have increased the cost by 13.2% and now, the cement is sold at Rs 395 per bag,” the petition stated and contended that their business is hit due to the price hike, as they had entered into contracts with the government on the basis of the cost of the cement at the time of agreement.
Since the PWD and industries department are the authorities to control price of cement, the contractors have moved the court, after several representations before the authorities themselves. Based on directions by the HC on an earlier petition, the industries department had directed the petitioners to approach the Competition Commission of India, but CCI is empowered to take action and penalise only if the manufacturers had entered into an agreement or formed a syndicate or an association for the sale price. The commission was not empowered to fix the price, the petition stated.
