The Confederation of
Real Estate Developers Associations of India (CREDAI) plans to discontinue
construction works indefinitely and stop procuring cement for its activities in
south India in protest against the steep hike in cement prices in the past one
month.
The construction
builders’ body may from June 30, 2014 stop procuring cement and withdraw from
construction work indefinitely starting July 7, 2014 government does not reign
in over the rising cement prices.
The real estate
sector expects the move to affect the ongoing Rs. 1 lac crore worth
construction activities in the south.
According to CREDAI,
Cement prices were up 25% from an earlier Rs. 255 to Rs. 325 a bag with effect
from June 1, 2014.
Mr. Ajit Chordia,
President , CREDAI-Chennai said “The
steep hike will result in an increase of about Rs. 45 per sft for property
buyers without considering the other costs. We can not pass on the hike to the
property buyers”
The price increase has affected the
construction activity in the Chennai suburbs.
“Almost 95% of the
public & private projects across south India and especially in Tamil Nadu
is at risk,” said Mr. Suresh Krishn ME, vice president and convenor, joint
action committee of CREDAI Chennai.
Mr. R. Radhakrishnan,
Chairman, Southern Builders Charitable
Trust, said ''The hike in cement prices could affect 10% to 15 % of their
turnover. The projects worth about Rs. 10,000 crore, including public and
private, were being executed in Chennai".
Government projects
in Chennai, including the metro rail, would be affected once the protest
begins. Mr. R. Radhakrishnan urged the Centre to establish a regulatory
mechanism for cement and provide concessions on import duty, allowing
construction firms to import cement from neighbouring countries. However, in
India, a cement manufacturer described the current cement prices a reflection
of escalation in costs and the high incidence of tax.
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