KARACHI, March 27: While consumers are paying Rs50 more on a 50 kg cement bag, cement makers and dealers trade charges for jacking up the rates. The government, however, has yet to sense heating up of another crisis- like-situation in cement trade after sugar and milk.

It seems that people, who have booked flats, apartments and bungalows, might have to pay more in case builders and developers join hands to cover up the rising cost of the project because of increase in cement prices. “Builders know how to cash on this kind of situation”, commented an expert.

Convenor Karachi Cement Dealers Association (KCDA), Shaukat Hussain said that all the manufacturers had been increasing the price by Rs5-10 per bag every week during the last one month. The cumulative increase in cement bag price comes to Rs50 in the last 30 days.

The manufacturers, conducting their business under a strong cartel, have actually reduced the cement production in order to create artificial shortage in the market so that prices could have been enhanced, which they had already done.

Even, he said, there has been a drop in the supply of cement in the market. As far as demand is concerned, there has always been a demand, no matter, if only few companies run their plants.

It may be mentioned here that builders and developers, who had suspended the media hype of their projects after October 8 catastrophe, have resumed their construction activities all over the country since the return of the labour from the quake-hit areas after winter and Eid holidays. The television and print media are now flashing the project promotional campaigns in a big way.

Besides, city district governments of various provinces, especially in Karachi, have geared up their efforts to complete the projects well ahead of time by undertaking the construction work on a day-and-night schedule.

A lot of people are also busy in giving a facelift to their old houses to escalate the demand of their housing units so that they could fetch a better return on sale.

Shaukat Hussain said that the government should allow a free hand to the dealers in cement import in order to build up pressure on the strong manufacturers’ cartel. However, he said, that currently the consumer saves Rs10 to 15 per bag on the imported cement, but the import procedure is, too, cumbersome for the dealers.

Executive Director Lucky Cement, Abdul Razzak Thaplawala said that the manufacturers had not raised the prices. “There might be an increase of Re1 or two by the manufacturers but dealers are charging the rates on their own,” he added.

Actually, there has been a slump in construction activities during the last two months because of winter followed by Eid holidays. Now the construction activities have picked up momentum, thus reviving the demand of cement, he said.

He said dealers are charging Rs305-310 per 50 kg bag without any reason as against Rs280.

“All the manufacturers are running their plant at full capacity so there is no bottleneck on supply side from the factories,” Thaplawala said.

Former chairman Association of Builders and Developers (ABAD), Babar Mirza Chughtai claimed that the cement bag price had surged by Rs90 in just one year to Rs330 from Rs255 without any reason. Two years back, cement was available at Rs220 per bag.

“This is another crisis like sugar but the government is still not realising its gravity,” he said adding that the cement contributes 30-40 per cent of the total cost of any project.

He said that the project cost of apartments, bungalows and flats will shoot up thus putting extra burden on the consumers.

He said a large quantity of cement is also being smuggled to Afghanistan besides, rising exports through legal channels to the same destination.

Acting chairman of ABAD, Nusrat Mirza Chughtai, in a letter to Prime Minister, Shaukat Aziz, said that the increase in cement price was unjustified and unrealistic as no change in input costs had been observed.

He said that the Monopoly Control Authority (MCA) was yet to play its due role to monitor the cement price surge besides, checking the cartel of cement makers.

He urged the prime minister to take necessary steps in bringing down the cement prices to save the construction industry from devastation and there was a need to make the MCA more positive and active.