Sri Lanka's construction industry is facing a shortage of about a million 50 kilogram sacks of cement a month, a media report said as price controls limit supplies and threaten the island's construction sector.
Amid the shortages created by price controls, state enterprises have got into the act like in the 'closed economy' days of 1970s when price controls and shortages of even foods were common.
One state agency has also got into a controversy for importing substandard cement.
"At the moment we can estimate that there are about Rs.1 billion worth of contracts being carried out," Sri Lanka's Daily FT newspaper quoted Rohan Karunaratne, president of the Ceylon Institute of Builders as saying.
"The imports by the government are inadequate. On average the government imports range around 200, 000 bags per month and this is even less than 20 percent of the required amount.
"We met with the Chairman of the Sri Lanka Cement Corporation on Tuesday morning and stressed that around 1 million bags are needed urgently to offset the shortage."
World cement prices have moved up amid a weakening dollar that has sent most commodities rising to new highs. Energy - a key ingredient of cement - is also high.
The Daily FT newspaper said local producers Holcim Lanka and Tokyo Cement can only supply 60 percent of the market.
But a part of Holcim's production and almost all of Tokyo cement is made by grinding imported clinker.
Cement firms have requested Sri Lanka's Consumer Affairs Authority to increase retail price of cement to 785 rupees per 50 kilo bag. But the agency and consumer affairs minister Johnston Fernando has denied the price increase.
The newspaper said suppliers from countries like Pakistan where a bulk of Sri Lanka's cement is imported have 'better offers' from other countries.
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