Real estate players in southern states threatened to stop construction work from next month.
CHENNAI: In protest against the sudden increase in cement prices by manufacturers, real estate players in southern states threatened to stop construction work from next month.
"There is no news on why there is an increase. What is the reason. Cement price has gone up by Rs 60 per bag to Rs 320. This is unwarranted...," Confederation of Real Estate Developers Associations of India (CREDAI) Chennai chapter President Ajit Chordia told reporters here.
Chordia said all the builders across the four southern states would stop purchasing of cement bags starting June 30. If the prices were not reduced by then, they would launch an indefinite stoppage of construction activities from July 7.
He said if the situation continued, the builders would be forced to increase the property prices which would only force the industry into problems at a time when the sector was showing positive signs of bouncing back.
According to CREDAI officials, the price of cement per bag which was sold to bulk customers at Rs 260, about 15 days back is being sold at Rs 320 now.
The hike in prices from June 1, 2014 has witnessed a 25 per cent increase per bag. With the increase of Rs 70 per bag, it will affect the already sluggish construction activity, they said.
Maintaining that the industry did not want to pass on the cement price burden to customers, he said, "there is no option to stop our work indefinitely if there is no decrease in cement prices...We have been forced to take this extreme step".
Referring to Union Government's vision of providing housing for all by 2022, he said the increase in prices by 25 per cent by cement manufacturers was "defying" the government policy.
Builders' Association of India National Trustee Radhakrishnan said a regulatory authority was required to be set up for cement industry on the lines of TRAI for telecom sector.
TANCEM ( Tamil Nadu Cement Corporation) promoted by the state government retails cement per bag at Rs 265 and was making profits, but private companies sold it at Rs 365 per bag, he said.
"It (the price rise) is a challenge to the vision of the new government at the Centre", he said.