The confederation of Builders Association of India Real Estate Developers’ Associations, and other federations in the realty and construction sector are in high dudgeon against the Cement Manufacturers Association, alleging that the latter has cartelized to raise cement prices by about 50 per cent over the last 30 days.
Because the prices of cement have shot up to Rs. 300-310 per bag, they have come to a decision not to buy cement stocks during July 5-12 as a protest counter to the monopolistic situation the cement sector enjoys.They want to highlight the issue. So, intentionally they are adopting a confrontationist mode.
C Sekhar Reddy, President, National, Credai, while addressing a press conference, said the housing sector accounts for major demand (64 per cent) of cement consumption in the country. The current situation does not warrant an over 50 per cent rise in cement prices.
“The price rise is only due to cartelisation. The Government must intervene and resolve the issue. We are also contemplating taking up the matter with the Competition Commission of India (CCI), which had earlier passed an order on similar concern. The cement sector needs a regulator,” he said.
A decision to oppose the cement price hike was taken by the Joint Action Committee, which includes Andhra Pradesh Real Estate Developers’ Association and Telangana Builders Forum, and represents over 2,000 developers and more than 1,000 contractors.
According to S Ram Reddy of Credai and P Dasarath Reddy of Apreda, such a hike necessitates increase in prices by builders by about Rs. 100-150 a sq ft, which is completely unjustifiable as there is no immediate trigger for such a raise in cement prices.
The construction and real estate sectors are just about finding their feet in the backdrop of the State’s division and such hikes are disadvantageous to the interest of all stakeholders —construction workers, general public, builders and their suppliers in different segments, and the Government.
The protest was aimed at communicating the concern of various groups to the Government said Shekhar Reddy. He further said that they plan to take other measures, such as pressing their demand for a cement sector regulator.
He also gives an opinion that the mergers and acquisitions were leading to greater consolidation and a monopolistic situation in the cement sector.