The Hindu : Karnataka / Bangalore News : Property developers pin hopes on cement imports

Online edition of India's National Newspaper
Wednesday, Aug 29, 2007
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Karnataka

Karnataka - Bangalore

Property developers pin hopes on cement imports

K. Satyamurty

Soaring cost of inputs putting pressure on profits
Work on many apartments has come to standstill

BANGALORE: The not-so-upwardly middle income citizens of Bangalore may be forced to wait longer for their “dream home” to materialise. Mid-sized and smaller builders and developers report finding it difficult to complete their apartments in time because of cost escalation and shortage of critical inputs.

But relief may be on way, according to A. Chamaraja Reddy, Chairman, Karnataka Centre of Builders’ Association of India. “Responding to our requests at a meeting held in Nagpur last week, Union Commerce Ministry has now decided to allow imports of cement through the Minerals and Metals Corporation of India (MMTC) and this may soften the severe cement shortage faced for three months now,” he told The Hindu. The cement imports were likely to be for a specified perio d and procurement would be through overseas companies registered with the Bureau of Indian Standards, Mr. Reddy said. “This was the only way out. Cement prices went up to an all-time high of Rs. 260 a 50 kg bag till a week ago; now they have stabilised around Rs. 190 to Rs. 200 a bag,” he said.

Steel prices too have gone up since December 2006. From Rs. 27,000 a tonne prevailing then, they rose to Rs. 31,000 a tonne in July before coming down to Rs. 30,000.

The purchases manager of a builder with two ongoing projects near the international airport at Devanahalli, said: “Cost escalation of inputs and shortage of cement have stalled several projects with flats in the price range suited to the middle income groups. Since the flats have been booked and advances paid, we cannot increase the final price; we can only wait for the market to stabilise.” Even the “low market” flats might now cost Rs. 1,500 a sq ft and closer to the city, as along the ring roads, Rs. 2,500 to Rs. 3,000, developers said. For the big names in the business, the situation is better.

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