KARACHI: Cement and steel prices have surged throughout the country following the prime minister’s announcement to build five million houses under the Naya Pakistan Housing Programme (NPHP), said builders on Monday.

“We see soaring steel bar and cement bag prices as a threat to NPHP initiated by Prime Minister Imran Khan,” said Association of Builders and Developers (Abad) chairman Mohammad Hassan Bakhshi.

Cement prices in southern region have risen by Rs20 and Rs80 per 50 kg bag in northern region within few days. Besides, the price of steel bar for high-rise building has also jumped to Rs107,000 from Rs100,000, builders claimed on Tuesday.

The Abad chairman claimed that the price of steel bar and cement has risen after announcement of NPHP, adding that the market is abuzz with reports that powerful cement makers may come out with another price shock of Rs20 per bag.

“Few powerful business houses have planned to sabotage prime minister’s low-cost housing programme. These manufacturers act as a cartel to play havoc with prices,” he said, adding the prices are crawling up ahead of government’s announcement to construct dams and housing units.

He said that association would highlight the sky-rocketing steel bar, cement and other construction material prices with the prime minister during a meeting on NPHP scheduled on Tuesday.

He said that there is a price difference between locally-produced and imported steel bars and cement bags. “Usually product assemblers fix prices by comparing them with global markets but they have not linked prices of cement and steel bar with global markets,” he said.

He also highlighted that of the total construction cost for high-rise building, the share of steel bars hovers between 30-40 per cent followed by cement at 10-15pc. Prices of tiles and sanitary products have also jumped by 15-20pc in the last 15 days, he deplored.

Dealers said steel bars made of ship plates now cost Rs100,000 as against Rs92,000-93,000 per tonne while prime quality now sells at Rs104,000-105,000 as against Rs100,000.

A cement maker said the retail price of ordinary portland cement (OPC) has risen by Rs20 per bag to Rs600-625 on account of rising gas, coal, diesel prices and rupee devaluation against the dollar.

Earlier, at a press conference Bakhshi urged the prime minister to ensure reduction in prices of cement, steel bars, tiles and other construction materials to make NPHP a success.

He also suggested the prime minister to appoint individuals from private construction sector to head task force set up for the NPHP.

He said the State Bank of Pakistan is carving out a financing model whereby it will lend 50pc of the total house cost to commercial banks at 1pc markup and commercial banks would provide the funds to allottees at 4-5pc rate and another 20pc would be borne by allottees.

Published in Dawn, October 16th, 2018