South Indian realtors to strike work against cement price hike

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cement bags

The real estate developers in south India have planned to discontinue construction work indefinitely and stop procuring cement for its activities in protest against the steep hike in cement prices in the last one month, according to a construction builders’ body.

The Confederation of Real Estate Developers Associations of India (Credai) has said from June 30, it may stop procuring cement and withdraw from construction work indefinitely starting July 7 if the government does not reign in the rising cement prices.

The real estate industry expects the move to affect the ongoing Rs 100,000 crore worth construction activities in the South.

According to Credai, cement prices were up 25 per cent from an earlier Rs 255 to Rs 325 a bag with effect from June 1, 2014.

“The steep hike will result in an increase of around Rs 45 per sft for property buyers without considering the other costs. We cannot pass on the hike to the buyers,” said Ajit Chordia, president of Credai-Chennai. The price increase has affected the construction activity in the Chennai suburbs.

“Almost 95 per cent of the public and private projects across south India and especially in Tamil Nadu is at risk,” said Suresh Krishn ME, vice president and convenor, joint action committee of Credai-Chennai.

R Radhakrishnan, chairman of Southern Builders Charitable Trust, said the hike in cement prices could affect 10-15 per cent of their turnover. He said projects worth around 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. He 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 contrary, a cement manufacturer described the current cement prices a reflection of escalation in costs and the high incidence of tax.

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