Construction work comes to a standtill

MUMBAI, JAN 15: The real estate industry in the metropolis has come to a total standstill on Monday to protest against the constant hike i...

MUMBAI, JAN 15: The real estate industry in the metropolis has come to a total standstill on Monday to protest against the constant hike in cement prices by a cartel of cement manufacturers. The industry, which is in the midst of a crippling recession, has decided to stop work till the cement manufacturers roll back prices.

Thanks to the strike, over one lakh daily wagers working in the construction industry will be jobless while the industry will lose Rs 4-5 crore daily. The decision to strike work was jointly taken by the Maharashtra Housing and Chamber Industry (MHCI) and Builders Association of India (BAI).

“The real estate industry is going through a bad patch with no buyers in sight… to make matters worse cement companies are increasing prices every fortnight which has led to a massive increase in costs. The builders will not make any money if the hike continues,” says a Mumbai-based builder.

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Says BAI spokesperson Vimal Shah: “We had to resort to this decision as the government has not initiated action against the cement manufacturers in spite of several representations from both the associations.”

Adds MHCI Vice President Niranjan Hiranandani: "The decision to halt all civil works has been ratified by the general body meeting of MHCI and we are going ahead with it."

The associations are planning to take up the issue with both the state government and the Centre. Though the Monopolies & Restrictive Trade Practices (MRTP) Commission has sent notices, the cement companie are in no mood to roll back prices as demanded by its consumers.

The MRTPC has served notices to L&T Cement, ACC, Grasim, India Cements and Gujarat Ambuja. Thy are the few companies which are decreasing production to create an artificial shortage in the market. At the same time, cement companies have also increased prices to Rs 105 per bag from Rs 90 per bag to cash in on the increase demand.

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The government of India would be the biggest victim of the increased cement prices as it is taking up a nationwide road programme which would require tonnes of cement.

High stamp duty, corruption in registration and stamp duty offices, fly-by-night builders, Urban Land Ceiling Act are some of the other reasons why Mumbai’s real estate industry growth has chocked. Despite various suggestions by the industry, successive State governments have failed to take any action on these issues.

“The metropolis is suffering from artificial scarcity of accommodation and now cement. This is the only sector which has not been libralised despite so-called era of economic refomrs. It’s high time the State government takes some steps to revive the industry or all new investments will flow out to Andhra Pradesh,” said a city-based builder.