COIMBATORE/CHENNAI: Construction activity across Tamil Nadu has been hit due to the spike in cost of materials such as m-sand, p-sand, river sand and blue metal by up to 30% over the last few weeks. Cost of construction of houses has gone up by nearly 15% to 20% (from Rs 2,200 to Rs 2,500 per sqft).
While new projects are being postponed, the price escalation has led to cost overruns in existing projects. Several government contractors, too, are worried. They fear that the price hike may affect the implementation of state and central government projects. Stone crushers may go in for another round of price hike in April, contractors said.
S Ramaprbhu, committee chairman, municipal and DTCP, Builders Association of India, said, “The price of a cubic feet of m-sand has gone up from Rs 40 to Rs 70. There is scarcity of river sand after Enforcement Directorate action. The quantum of river sand brought illegally from Nellore has gone up.
Usually, builders shell out Rs 80 for one cubic feet of river sand, but now it is being procured from Nellore at a cost of Rs 120. The price of bricks has increased from Rs 30,000 to Rs 34,000 (per 3,000). This is having a cascading impact on the construction sector,” he said. “M-sand, p-sand, river sand and blue metal come under state control and do not fall under the Reserve Bank of India index,” K Venkatesan of BAI said.
BAI members plan to meet ministers over price rise
“This would mean that government contractors will not be compensated for price escalation,” said K Venkatesan, a government contractor and state secretary of Builders Association of India (BAI). The rise in price of construction materials may hike the project cost by at least 25%, he said.
BAI office-bearers are planning to meet Minister for Water Resources and Minerals and Mines Duraimurgan, Minister for Public Works, EV Velu, and Minister for Housing and Urban Development S Muthusamy to resolve the issue. “If the talks fail, we are planning to go on a strike which may impact state and central government projects,” Venkatesan said.
KCP Chandra Prakash, president, Coimbatore Crusher and Quarry Association, said, “The increase of crusher material price (m-sand and P-sand) is inevitable. EB charge for quarries have gone up from Rs 3 lakh to Rs 6 lakh per month, royalty charge has been hiked from Rs 300 to Rs 600 per unit, and labour charge has gone up from Rs 650 to Rs 1,300 per day. We had planned to increase the price by Rs 1,000 per unit from February, but considering the burden on consumers we hiked the price by only Rs 500 per unit. Now, we have decided to increase the price by another Rs 500 per unit from April.”
R Ganeshkumar, president, BAI, Coimbatore, said, “The price of crusher materials --- m-sand, p-sand and blue metals --- have increased by 30% to 40% from February 1. The price of blue metal has gone up from Rs 3,000 per unit (100cft) to Rs 4,500. M-sand price has gone up from Rs 3,500 to Rs 4,500 and p-sand from Rs 4,000 to Rs 5,500 per unit. Around 40% of contractors have stopped their construction work temporarily due to disagreement with customers on cost increase.”
Due to stoppage of work, workers, especially migrant labourers, are facing difficulty in finding jobs.