Consumers might have to shell out at least a lakh more for their apartments and individual houses since the price of construction materials like cement, steel and brick has increased drastically. The construction industry has taken a beating owing to steep rise in cement price in the last one month. The price of a 50 kg cement bag has now shot up to `265 from `170. Builders say the price rise has pushed the overall construction cost by up to `120 per sq ft.
T. Chitty Babu, president, Confederation of Real Estate Developers’ Associations of India (CREDAI), Tamil Nadu, said, “It is an artificial price rise triggered by manufacturers who have reduced production. It is estimated that production has fallen by nearly 50 per cent.” He said the cement price rise has put unnecessary pressure on government-initiated projects, infrastructure and housing projects. “If this continues, builders will halt projects, which will only lead to housing shortage and unemployment. Never have the prices risen so sharply in a week’s time,” he said. However, Mr Babu believes that it is only a temporary situation. “The prices will fall once the demand comes down and builders stall their projects.”
S. Govindarajan, proprietor of Magnum Associates, said buyers and builders would be most affected by the price rise. Also, the price of bricks increased from `14,000 (3,000 nos) to `16,000 in the last one month. Like cement, brick price rise is also caused by kiln owners through ‘artificial’ demand, he argued.
Engineers in the state have upped their ante against the steep rise in price of constructional materials. Federation of all civil engineers associations of Tamil Nadu has appealed to the government to take steps on a war-footing to control the price of materials, particularly cement and steel.
According to federation president R. Mohanraj, the price of cement rose from `150 per bag to `290 (pricing varies for different brands) and steel price has increased by `5,000 per tonne in the last one week alone. Even bricks were not spared. It was imperative on the part of the government to intervene and reduce the price of cement, steel and bricks among other construction raw materials, he said.
“The price hike in Tamil Nadu is unjustified. The prices in neighbouring Kerala, Karnataka and Andhra are still very low,” Mr Mohanraj said, urging the government to fulfil their long-time demand of bringing construction materials under the category of essential commodities to prevent such price hike. The engineers also demanded the setting up of a committee to monitor price fluctuations.
The all-India president of construction workers federation, R Singaravel, said apart from private projects, Kalaignar housing scheme, the pet project of the ruling DMK, would be hit by the price hike. Given the recent price hike, the `75,000 subsidy offered by the state for the scheme would be inadequate, he said, advising the government to increase the subsidy to at least `1.5 lakh per concrete house.
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