November 9, 2005	Wednesday	Shawwal 6, 1426

ISLAMABAD, Nov 8: The government plans to shortly approve new measures including the imposition of heavy penalty for abusing the dominant position by the cement manufacturers to increase prices without any justification.

Official sources told Dawn here on Tuesday that Monopoly Control Authority (MCA) has sent a draft law to the ministry of finance for approval to discourage what was termed “anti competitive behaviour of the cement cartel in the country”.

In case of violation of law, the MCA has proposed Rs10 million penalty against the cement manufacturers. Currently, there was no penalty against the violators which will be shortly introduced after the formal approval of the cabinet and the parliament.

While the government did not want to discourage investment in the cement sector, the sources said, it certainly wanted to curb increasing cement prices in the market by actively monitoring the issue.

In this behalf, the MCA has issued show-cause notices to the cement manufacturers to bring down their prices within a week, failing which action will be taken against them. “If there is no compliance, then the MCA will impose adequate penalty against them”, a source said.

The sources said that excise duty on cement was reduced by 25 per cent in 2003-04 but this relief was not passed on to the people by the manufacturers.

The MCA has issued show-cause notices to 18 cement factories for not reducing prices despite repeated warnings given to them by the concerned government authorities.

These notices had been issued under Section 11 of the Ordinance V of 1970 in violation of Section 6(1)(a) (Forming of Cartel).

According to the details made available to this correspondent, M/s Attock Cement Pakistan Limited, M/s Askari Cement Limited Wah, M/s Bestway Cement Limited, M/s Cherat Cement Company Limited, M/s Dandot Cement Limited, M/s Dadabhoy Cement Industries Limited, M/s D.G.Khan Cement Company Limited, M/s Fauji Cement Company Limited, M/s Gharibwal Cement Limited, M/s Kohat Cement Limited, M/s Lucky Cement Limited, M/s Maple Leaf Cement Factory Limited, M/s Askari Cement(Nizampur) Limited, M/s Pioneer Cement Limited, M/s Pak Land Cement Limited, M/s Saadi Cement Limited and M/s Zeal Pak Cement Factory Limited have been asked by the MCA to reduce per bag Rs12, Rs51, Rs36, Rs47, Rs55, Rs47, Rs60, Rs38, Rs37, Rs55, Rs40, Rs52, Rs56, Rs51, Rs39, Rs50, Rs36 and Rs49 respectively.

The government had been considering various options to bring down the prices of cement. Earlier, it had given some time to the owners of cement factories to bring down the prices at the level of June 9 this year to avoid what was termed “some immediate action”.

The government had told the owners that the increase in the cement prices was “just unacceptable” as it would cause more inflation.

The other option was to allow the housing and construction builders to import duty-free cement or through revised duty structure with a view to check the prices of cement.

The operating profit of the cement factories, turned into cartels, has reached to Rs1,200 per ton which was highest in the history of Pakistan and the highest in the region, the sources said.

Cement factories have exported 1.443 million tons of cement during July-May of 2004-05 which was 10 per cent of the total production. And now t