April 04, 2008	Friday	Rabi-ul-Awwal 26, 1429

ISLAMABAD, April 3: The All Pakistan Contractors Association (Apca) has threatened to stop work on development projects across the country if the new government fails to increase the cost of ongoing contracts in accordance with the rise in prices of building material since September last year.

The association’s chairman Shahid Rafiq said at a press conference here on Thursday that the price of steel had increased by about 60 per cent, of cement by 26 per cent, petrol by 18 per cent and diesel by 14 per cent and the wages of skilled labour had gone up by 62 per cent since September 2007. He said the prices of bitumen, bricks and other construction material and wages of unskilled labourers had also increased significantly.

He said the contractors were suffering heavy losses because of the increased cost and were finding it impossible to continue work on the projects.

He said the government should announce an adequate increase in the construction cost of the projects to enable the contractors to complete them in time.

He demanded that the condition in the contracts of using billet steel made only by the Pakistan Steel Mills (PSM) should be changed. He said the clause had multiplied the demand for billet steel, resulting in black-marketing.

He said the contractors should be allowed to use steel of equivalent quality and import steel bars from any country, including India, without customs duty, sales tax and a no-objection certificate from the PSM or any other department.

He demanded withdrawal of the 15 per cent sales tax and one per cent excise duty on the sale of billet and other products of the PSM to reduce the price of steel.

He said all contracts, irrespective of the amount and timeframe, must include an ‘escalation clause’ allowing contractors to demand additional funds for completing projects in case of increase in cost of construction material.

Mr Rafiq said the contract laws gave discretionary powers to the employers.He said the Pakistan Engineering Council had prepared standard bidding and contract documents, which had been approved thrice by the Executive Committee of the National Economic Council and notified through an SRO by the Planning Commission but they had not been implemented since 2002. He said the implementation of the documents would solve about 70 per cent problems of the contractors.

The association demanded a ban on export of cement to reduce its price in the local market. It demanded import of bitumen without customs duty and sales tax to ensure its availability throughout the year.

Mr Rafiq said road contractors were facing problems in getting bitumen at reasonable rates after the privatisation of the National Refinery in Karachi.