The Hindu : Control steel, cement prices: flat promoters

Online edition of India's National Newspaper
Monday, Mar 22, 2004

Tamil Nadu

Tamil Nadu - Chennai

Control steel, cement prices: flat promoters

By Our Staff Reporter

CHENNAI, MARCH 21. Flat promoters in and around the city on Saturday urged the State and Union Governments to intervene and control the cost of key construction materials, especially steel and cement.

The entire sector was reeling under the spiralling steel and cement prices. While steel prices rose in the last six months from Rs.17,000 a tonne to Rs. 27,000, the cost of a cement bag went up in the last quarter by Rs.50, say leaders of the Confederation of Flat Promoters' Associations.

The confederation, in which 300 builders and flat promoters are members, is an umbrella body for the Chennai Suburb Builders' Association, the Flat Promoters' Association, the North Madras Flat Promoters' Association and the Singara Chennai Builders' Association.

Addressing newspersons, leaders led by the confederation chairman, K. Kannan, said about 1,000 housing projects — each estimated to have eight to 10 flats — in different stages of construction were affected because of the price hike.

Stating that they found it difficult to convince customers to bear anything beyond 10 per cent in terms of cost escalation, the general secretary, G. Mohan, alleged that steel and cement manufacturers were `operating in cartels.'

The prices had gone up without any increase in the cost of raw materials used for manufacturing steel and cement, he claimed.

In any project, cement and steel, and labour accounted for 30 per cent of the project cost.

If the trend continued and the government did not intervene, the builders would consider stopping purchase of steel and cement for a month, as a mark of protest, said G.S. Narayanan, president of the Chennai Suburb Builders' Association.

Noting that the construction sector generated direct and indirect employment opportunities for lakhs of people, AL. Arumugam, president, Singara Chennai Builders' Association, said there was a need to streamline the clearances for the industry.

The builders wanted the Chennai Metropolitan Development Authority to amend the development control rules to meet present day requirements and be in tune with the official policy of the State that gave priority to housing.

The government should review the rule that `even ground plus one floor' constructions should secure a `completion certificate' for getting water, sewer and power connections.

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