March 06, 2007	Tuesday	Safar 16, 1428

ISLAMABAD, March 5: The government has got some initial clue which suggested that cement manufacturers have developed a cartel to increase the prices of the commodity every now and then without any valid reason.

Informed sources told Dawn on Monday that the concerned officials were directed by President Musharraf to get to the bottom of the issue so as to prevent "unjustified" hike in the cement prices by breaking any cement cartel.

A source in the ministry of industries said that Minister for Industries and Production Jhangir Khan Tarin would soon be holding another meeting with the cement manufacturers and builders to get further decrease in cement prices.He said the cement price, which had reached Rs366 per bag in April last year, was Rs210-215 in January this year. "In between this price was as low as Rs150-155 per bag, which was later found unsustainable by the dealers who then made large orders for more and more cement bags." He said that prices of various commodities including that of cement could not go unchecked by the government keeping in view the coming elections.

Chairman of the Monopoly Control Authority (MCA) Khalid Mirza when contacted said he had received a "reference" from the federal government to investigate whether there existed cement cartel, which was involved in undue cement price increases.

"I am investigating the issue and hopefully I would give my report to the government within 3-4 weeks time," he said.

Asked about any clue of the cement cartel, he said so far he had not received any ‘solid evidence’ and was still looking for it to propose any penalty against them.

However, he said: "They (cement manufacturers) may have developed an understanding to increase cement prices," he said. But he added that the MCA could not go on appearances and would like to have detailed information with a proof to propose any action against the cement manufacturers.

Responding to a question, Mr Mirza said that the capacity of the cement industry had increased by over 8 million tons, which suggested that cement prices should not had gone up constantly and that they would have to come down. So far the ministry of industries, he said, had fixed Rs260 as the price of per bag of cement.

According to a latest World Bank report, Pakistan has been asked to "track down illicit cartels" to regulate businesses without which it would be difficult to attract adequate local and foreign investment in the country."We understand that proven or suspected cartels have existed and many still exist in cement, sugar, ghee, autos, fertiliser and perhaps other industries, which need to be investigated," said the report.

The report entitled "Establishing a Functioning Competition Commission" said that cartels were by a long way the "chief impediment" to competition in Pakistan and that there was a need to conduct a thorough inquiry as what types of anti-competitive conducts were most prevalent in Pakistan.

"We understand that the MCA has investigated 103 cases of monopoly, including cars, batteries, tobacco, electrical, gases and chemicals. Of course, this figure by itself provides no indication of abuse of monopoly position. However there is a wide field for inquiry, the report suggested.

The report proposed that the government would need to build up an experienced capacity for tracking down illicit cartels in the country.