Telangana: Realtors cry foul over cement price

Deccan Chronicle.

Nation, Current Affairs

An industry expert from cement sector, however, denies the allegation.

Cement is a key input for the housing sector and a steep hike would push real developers into losses as we could not pass on the hike to buyers. (Representational Image)

Hyderabad: Real estate developers in the state have cried foul over a steep price hike in cement prices and asked cement manufacturers to roll back the increase to protect the housing sector in Telangana.

“Cement is a key input for the housing sector and a steep hike would push real developers into losses as we could not pass on the hike to buyers. It will also affect the government projects as contractors would seek to transfer the hike through cost escalation clause, affecting government finances. It will also come in the way of the government’s plan for constructing affordable housing,” Mr S. Ram Reddy, president of Credai Hyderabad, told this newspaper.

Mr Reddy is also the chairman of a joint action committee formed by Credai, Telangana Real Estate Developers Association, Builders Association of India, Telangana Builders Federation and Telangana Developers Association.

Mr Reddy said that the cement was sold around Rs 250 per bag in March in Hyderabad and the same is sold for Rs 375- Rs 400, which is a 60 per cent hike.

Saying that the landing price of imported cement would be cheaper than domestic price, Mr Reddy said developers may consider importing cement, if the price hike was not rolled back.

Typically, cement cost makes up 15 per cent of the project cost. After the hike, cement would constitute 24 per cent of the project cost, eating away nine per cent from the realtor’s margins. “As 75 per cent of cement dem-and comes from individuals, it would affect the construction sector,” he said.

An industry expert from cement sector, however, denies the allegation. “Most cement plants are operating at 45-50 per cent capacity while overheads are constantly on the rise. Coal price is on the rise and power tariff is expected to go up soon. Unless, cement companies hike prices they can’t survive. However, cement companies would sell cement to realtors at a discounted price considering bulk purchases,” said K. Nagaraju, a cement industry expert.

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