Construction industry in Telangana, Andhra to stop cement purchase

Real estate developers and builders in both Telangana and Andhra Pradesh have decided to stop purchase of cement from July 5 to 12 if cement companies fail to roll back the steep hike in prices.

Terming the hike of 50 percent as "unjustified", the construction industry Wednesday called on people to join the protest.

The decision was taken by the Joint Action Committee (JAC) of the chapters of Confederation of Real Estate Developers' Associations of India (CREDAI) in both the states, Andhra Pradesh Real Estate Developers' Association (APREDA), Telangana Real Estate Developers' Association (TREDA), Builders Association of India (BAI) and Telangana Builders Federation.

The JAC, which is represented by more than 2,000 developers and 1,000 small, medium and mega contractors, unanimously decided to stop the procurement. They purchase daily about 20,000 tonnes of cement.

The JAC warned that if the cement companies failed to roll back the hike till July 12, it will be forced to stop the purchase indefinitely.

Leaders of various groups of developers and builders alleged that the cement manufacturers created artificial shortage by forming a cartel and increased the price overnight by Rs.100 per bag (of 50 kg). They reiterated their demand for an authority to control the cement industry.

They said the hike dealt a blow to the real estate sector even as it was trying to recover after five years of uncertainty.

The developers will suffer a loss of Rs.200 per square feet due to the hike as they cannot charge escalation, he said.

C. Shekar Reddy, CREDAI national president and JAC chairman, urged the governments of both the states to intervene as the hike would hit their schemes for affordable housing for poor.

He wondered why the cement manufacturers resorted to the hike when the transportation costs in Andhra Pradesh and Telangana were minimal.

The two state contribute 80 million tonnes, which is 25 percent of total capacity of 325 million tonnes in the country.

He alleged that the cement companies increased the price in south India without any reason. The builders and developers in Tamil Nadu have also stopped purchase to protest the hike.

The price of cement bag was Rs.165-Rs.190 for the last 9-10 months. The manufacturers suddenly increased the price by Rs.100-Rs.120.