KARACHI, July 14: Prices of cement and steel have surged by 20 and 23 per cent, respectively, and this rise may create severe crisis for the construction industry, the Association of Builders and Developers (ABAD) said on Monday.

Prices of cement were increased 15 days ahead of the federal budget by cement makers’ cartel, fearing that if excise duty on cement was reduced in the new budget they (cement makers) would be able to fix the prices accordingly.

ABAD chairman Hafeez-ur-Rahman Butt said that instead of reducing the prices on account of cut in excise duty by 25 per cent in the budget, cement makers increased the price. The new prices now ranged between Rs210 and Rs225 per 50 kg bag. In December 2002, cement was available at Rs160 per bag.

The government, he said, should now act to break the cement makers’ cartel and fix the prices of cement between Rs160 and Rs170 per bag. He said the government-owned cement factories like Javedan and Thatta Cement had also become the active members of this illegal cartel.

In a statement, he deplored the concession granted by the government by minimizing excise duty on cement as it did fail to produce any desired results. Mr Butt said price of steel had been increased to Rs30,000-32,000 per ton. Prior to the budget, steel was available at Rs24,000 per ton.

He urged the government to allow import of cement and steel from neighbouring countries where building material was cheaper than Pakistan.

Later talking to Dawn, he said he had discussed the problems of construction industry with the Sindh chief minister.

On the government’s steps in the budget 2003-04 in promoting construction activities, he said construction activities in Punjab were going swiftly as the provincial government was also providing various incentives in this regard.

However, he said, construction activities in Sindh had yet to pick up the desired pace after the budget as no new projects were coming up.