Cement prices worry TRS

Hyderabad: The Telangana Rashtra Samiti government is concerned about the steep increase in cement prices at a time when it is planning to launch it’s ambitious housing scheme for the poor by constructing double bedroom flats in urban areas and houses in rural areas on plots measuring 125 sq. yards.

In fact, constructing double bedroom flats/ houses for the poor was the major poll promise of TRS in the recent general elections.

Political analysts say that this issue played a crucial role in the TRS winning the elections. The importance given by the party to the housing scheme can be gauged by the fact that Chief Minister K. Chandrasekhar Rao has retained the housing portfolio to see that the results are delivered on time.

TRS strategists who worked out the scheme, had pegged the cost of each double bedroom flat / house at Rs 3 lakh while incorporating it in the party’s manifesto.

However, when Mr Rao recently held a review meeting with the Housing department to discuss the issue, the officials informed that Rs 3 lakh would be not be sufficient to build a double-bedroom flat / house as per the existing prices of cement, steel and other construction material. In fact the sharp rise in cement prices would mean that the construction cost would double to nearly '6 lakh.

Mr Rao immediately directed Chief Secretary  Rajiv Sharma to intervene and hold a meeting with cement producers to bring down the prices. A meeting was held on Monday though nothing came out of it.

However, cement producers argue that the prices had been kept low in the state artificially all these years due to which the cement industry was incurring losses. They say the power charges and other taxes have shot up, putting pressure on cement prices.

According to cement manufacturers, cement prices per bag (of 50 kg) in Tamil Nadu had increased to Rs 330 to Rs 350, compared to Rs 300 to Rs 330 a bag a year ago. Prices in Karnataka vary, in Bengaluru it is Rs 280 to Rs 290, while in Mangalore it is Rs 310 a bag. In Kerala, the price range is Rs 325 to Rs 330, up by Rs 15 since last year.

In North India the price of cement is in the range of Rs 265-350 per bag.

However, in Andhra Pradesh, the prices had remained static at Rs 230 till May as there was poor demand in the state due to political turmoil for the last four-five years.

“With political uncertainty ending with the formation of two states and two stable governments, besides a stable government at the Centre, the focus has now shifted back to giving impetus to infrastructure development in the entire country, resulting in correction of cement prices in AP and Telangana state. It’s not fair to say that the cement prices have increased here. The prices just got corrected and aligned with the entire country,” said K. Ravi, managing director of Nagarjuna Cements.

However, builders allege a “syndicate” behind the steep price hike. “The situation doesn’t warrant cement producers to affect such a steep hike in one month. There are no such drastic changes on the infrastructure front with the formation of two new states. The sector will develop gradually over a period of time in both the states. Hiking prices under the guise of political stability and formation of new states is totally unjustifiable,” said C. Shekar Reddy, national president, Credia.

• Political analysts say that the TRS’ promise of constructing two bedroom houses for the poor played a crucial role in the party winning the elections
• Cement producers argue that the prices had been kept low in the state artificially all these years due to which the cement industry was incurring losses.
• They say the power charges and other taxes have shot up, putting pressure on cement prices