Cement prices ‘stalling civic projects’

Cement prices ‘stalling civic projects’
Published: 26 May 2006

Contractors responsible for carrying out repairs of roads and bridges in India claim that cement manufacturers are to blame for recent delays in work due to the increase of cement prices by almost 70 per cent in just six months.

The Builders Association of India (BAI), which held a meeting over the issue at Indian Merchants’ Chamber near Churchgate on Thursday, is quite convinced that cement manufacturers have formed a cartel to indulge in profiteering. The association is blaming the government for overlooking the entire issue and neglecting the woes of contractors, especially in infrastructure projects like bridges, flyovers and roads.

“We had a joint meeting with the Ministry of Commerce, cement manufacturers and other concerned bodies on May 12. We were promised a five per cent cut in prices by May 15. But the government and cement manufacturers have done nothing so far,” said Anand Gupta, Chairman of the association.

As for the cement manufacturers’ cartel, BAI cites statistics given by the Cement Manufacturers’ Association itself which clearly show that there is no shortage of cement. Also, they add, marginal demand has not gone up so high that it would force prices up by 70 per cent. Margins of retailers have also not gone up.

“But the profits of four major cement companies for the first quarter have gone up substantially. ACC’s profits were up by 100 per cent, Gujarat Ambuja’s by 41 per cent, Utratech Cement’s by 74 per cent and Grasim’s by 99 per cent. The first two are from Holcim Group while the rest are of Kumar Birla Group and hold 23 and 26 per cent market shares, respectively. So they don’t have any problem,” he said.

All ongoing projects undertaken in the current year will be affected. “We can’t place bulk orders. And with cement companies allotting only weekly requirements, ongoing projects along with fresh ones will be effected,” a member of BAI told Mumbai Mirror.

Gupta pointed out that the government does not even revise the prices at which private developers agree to complete works. “Hence, we have to bear losses,” he Gupta said.