The construction sector, which has already been hit by the coronavirus pandemic, is being pushed into a crisis due to the steep hike in the cost of sand, cement and steel, apart from the abnormal increase in transportation costs, said CREDAI chairman Bayana Srinivasa Rao and president KSRK Raju.
Addressing a media conference in Visakhapatnam on Tuesday, they said that the price of steel, which was between ₹43,000 and ₹46,000 in March 2020, now ranges between ₹67,000 and ₹70,000, a tonne. The corresponding rates for cement, which ranged from ₹230 to ₹260 for a 50kg bag, now costs between ₹370 and ₹400 and river sand which was ₹3,500 a unit, now costs ₹6,000.
Similarly, the cost of materials used in secondary stage construction such as tiles, electrical materials, fabrication, putty and paintings, plumbing, sanitary and wood have all increased.
They wondered as to why the cost of steel and cement should be hiked, when there was no increase in taxes. An additional burden of about ₹500, per sft. was being borne by the builders and this was resulting in a steep increase in the final cost of the flat and causing burden on the consumers.
Mr. Raju said that delays in the issue of various clearances was also leading to delays in the completion of housing projects and leading to cost escalation. The increase in petrol/diesel prices has a cascading effect on material prices due to the high transportation cost. The builders were paying high interest on the loans taken from banks and sought that it should be reduced to around 7% in view of the crisis in the industry. CREDAI-Visakhapatnam honorary secretary E. Ashok Kumar was present.
