LAHORE, Aug 22: Steel price has gone up 68 per cent in the last six months or so to Rs32,000 per ton from Rs19,000 per ton.

“The rise in steel price is unrealistic and uncalled for and driven the construction industry into a crisis,” says the All Pakistan Contractors Association (APCA).

“The increase has made construction contracts in hand unviable and put the construction industry in a fix because the government has failed to take notice of this trend,” the APCA says. It says the steel prices have registered the increase because of a gap in the supply and its rising demand due to the launch of several mega projects in the country.

“The government will fail to achieve the results of incentives offered by it to boost the housing and construction sector in the budget for 2003-04 if an immediate notice of the situation is not taken,” the APCA says.

It also urges the government to allow duty-free import of steel in the interest of the construction industry.

The APCA alleges that cement producers have increased their prices by Rs30 per bag despite 25 per cent reduction in the excise duty in the budget 2003-04. “While a cement bag was available for Rs190 before reduction in the excise duty, it’s now available for Rs220. Instead of slashing prices, the cement producers have enhanced their prices. It is merely due cartel created by the cement producers.”

The APCA says: “The government must allow duty-free import of cement if the producers are not prepared to break their cartel and slash the rates in view of incentives given to them in the past several years and a 10-per cent rise in the cement consumption in the last couple of months.”

Unless the prices of steel and cement are reduced to a realistic level and stabilized, the APCA maintains, the very objective of kick-starting the national economy and generating jobs by boosting the construction and housing industry could not be realized.