KARACHI, Nov 19: Former chairman of the State Cement Corporation Mr Murlidhar P. Gangwani has revealed that the per capita consumption of cement in Pakistan is the lowest in the world which is an indicator of the low priority having been attached to the housing sector in the country.

Speaking at the weekly lecture series organised by the Pakistan People’s Party at its central secretariat here on Sunday, Mr Gangwani discussed “Cement crisis and its impact”, pointing out that Turkey with one third of Pakistan’s population was producing three times the quantity of cement than what was being produced by Pakistan.

Deputy leader of the opposition in the Sindh Assembly Mr Murad Ali Shah presided over the sitting.

Describing the privatisation programme, under which the cement industry has also been denationalised, as ‘highly questionable’ Mr Gangwani said that industries had been sold away to private investors at a price which was hardly equivalent to two years of revenues collected from each of the public sector industries regularly.

The taxes being paid by the public sector Thatta Cement factory were double than the amount paid by private sector units in the area under this head despite producing more than three times the production of Thatta Cement.

“The privatised industry has formed its ‘cartel’ which evades taxes in a big way, reduces capacity utilisation to 60 per cent and increases the prices of cement by creating artificial shortages in the market. Previously, even when only four factories and five per cent of the total production were left in the public sector, the State Cement Corporation had raised it capacity to 130 per cent and maintained the prices at Rs200 per bag.”

According to him, when the last four units were privatised in January this year, the per bag price shot up to more than Rs400 without any corresponding increase in the prices of any input or taxes.

The per bag price has now come down to the level of Rs250 as a result of the public outrage.

This was yet another proof that the cartel had raised the price without any justification and the ‘reduced price’ (Rs250) still earns them windfall profits.

The former State Cement Corporation chief observed that as a result of marginal priority attached to development and housing, the demand for cement was much lower than its production.

The capacity would be doubled by 2010 with the installation of new units.

It would be a pity that the private cartel keeps on producing cement from 100 per cent indigenous raw material for development in other countries while our own country has remained miserably underdeveloped.

Mr Gangwani stressed the need for the formation of a strong regulatory authority, comprising industry professionals, and strengthening of the Pakistan Standards Institute.

If it was not possible to renationalise some of the privatised units, the state should put up its own units to stabilise cement prices. He suggested that the government taxes of Rs80 per bag should be reduced and its benefit should be passed on to consumers.

The fuel and electricity costs should be brought down. Coal resources of the country should be developed and low cost coal should be used as energy resource.

Coal ash from the cement industries and new power plants was a very good raw material for producing quality cement just like the slag previously thrown away by the Steel Mills was being used for producing the best quality slag cement.

And above all, Mr Gangwani insisted, the country should undertake a fast track public works and housing programme in order to drag the country out of backwardness and increase the per capita cement consumption to the level of at least that of the developing countries.

Syed Murad Ali Shah, in his concluding remarks, said that the cement sector had defied all laws of economics since this was one sector where the prices for the consumers had jumped sky-high although the supply was much higher than the demand. He spoke of an unholy alliance formed by producers and the regulators to fleece consumers. The Monopoly Control Authority had, in fact, been protecting and promoting the monopolies, he charged.