CREDAI face-off may hit constructions in Andhra Pradesh

Vijayawada: The AP chapter of Confederation of Real Estate Developers Association of India (CREDAI) has issued a warning to cement manufacturers to stop their unethical practice of declaring a 'despatch holiday' -  not lifting loads despite payments having been made well in advance — or it "would be forced to stop construction activities across the state within four days.”

This ultimatum has prompted the state government to address the impending crisis on a war-footing as CREDAI’s decision will seriously hamper the large-scale construction activity going on in the capital region.

The Chief Minister’s Office (CMO) directed both parties to have a dialogue with senior officers in the Union ministry of commerce and trade.

To make Indian cement/clinker competitive globally, the Cement Manufacturers Association (CMA) had urged the Union Government to see that the royalty paid on limestone be neutralised for export of cement, the thinking behind this being that domestic taxes not be levied on exports. They pointed out that there was no customs duty on cement imports.

CREDAI AP chapter’s response to this was that the CMA was seeking the government’s intervention in addressing this anomaly only to curtail an indiscriminate hike in prices.

Terming the increase in prices to Rs 100 a bag as highly unethical, CREDAI has asked the CMA to explain the rationale behind it. It alleged that the manufacturers were creating an artificial scarcity to increase prices by blocking stocks at the plants themselves.

In fact, a working group's report on the cement industry in the 12th five year plan (2012-17) stated that the existing plants and those in the pipeline suggested a continued excess in production capacity.

“We want to tell the CMA that these strong-arm tactics can’t be allowed in the state," said A. Siva Reddy, president, CREDAI AP chapter, and Chigurupati Sudhakar, president, CREDAI Vijayawada chapter.

They said that they had asked all 19 chapters of the federation to stop construction activity in four days’ time. If the issue was not resolved, they would stop making purchases from Indian manufacturers and will import cement.