Thiruvananthapuram: The Government Contractors' Association (GCA) has come out against the state government for increasing the prices of cement in the state. The price of a 50-kg sack of cement is currently ranged between Rs 420 and Rs 430. However, the same is supplied to large builders like L and T and neighbouring states like Tamil Nadu at Rs 120 to Rs 140.
This is because they have entered into 'annual contracts' with the cement manufacturers by agreeing to purchase a stipulated quantity every year, Mr Varghese Kannampally, state president of GCA, told Deccan Chronicle. Tamil Nadu government supplies the same to builders and individuals at a price of Rs 190 by adding transportation charge and a margin of profit, Mr Kannampally said. The production cost of cement averages between Rs 60 and Rs 70 per 50 kg.
The VAT is fixed at 12.5 percent. Even if transportation and handling charges are added the price would come in the range between Rs 160 and Rs 180 for bringing cement to the state if the government enters into an annual contract with the cement companies. The same can be supplied to individuals and builders at the rate of Rs 200 to Rs 220, Mr Kannampally said.
The government is reluctant to go for an annual contract due to the tax its gets and also the profit ensured to the public sector Malabar Cements. However, the contractors would transfer the burden to the government by quoting higher rates for contracts, Mr Kannampally said.
