CHENNAI: Prices of construction materials have shot up in Tamil Nadu amid government clampdown on illegal mining, prompting fears of artificial supply crunch and cost escalation by cartels.
As the prices of key construction materials such as m-sand (manufactured sand), p-sand (plastering sand), blue metal, and wet-mix have gone up by nearly 20% to 100% in a week, Minister for Natural Resources Dr T K Prabhu has called for a meeting of stakeholders on Thursday.
“This price hike could be a pressure tactic,” the minister told TNIE. S Ramaprabhu of Builders’ Association of India (BAI) concurred with the minister, saying that artificial demand is being created to increase prices after the government’s crackdown.
As per rough estimates, Tamil Nadu requires about 75,000 units of m-sand every day which is almost equal to the estimated production in the state. Of this, Chennai region alone consumes 30,000 units.
Additionally, about 50,000 units, generated through illegal quarries, are sent to Kerala and Karnataka every day, sources said, suggesting no perceptible drop in production due to mine closures.
However, the per-unit price of m-sand has now gone up from Rs 3,800 to Rs 5,000, and p-sand from Rs 5,000 to Rs 6,000, according to industry sources. While the price of wet-mix concrete has almost doubled to Rs 4,000 from Rs 2,300, gravel cost has jumped from Rs 2,300 to Rs 4,000 per unit in Chennai, sources said. As a result of this steep hike, the construction cost of apartments has increased from Rs 2,500 per sq ft to Rs 3,000 per sq ft in the capital, sources added.
Over the past few days, the Department of Geology and Mining had inspected 431 of the 2,000-odd authorised stone quarries across TN and detected violations in 155 quarries. Following this, operations in 67 quarries were temporarily suspended. Further action is being taken to suspend operation in the remaining quarries, sources said. “We will listen to all stakeholders at the Thursday meeting, but action against violations will continue,” minister Prabhu said.
Tamil Nadu Stone Quarries, Crusher Units and Lorry Owners Association president K Chinnasamy, however, denied the allegations and said the quarries are selling the materials at prices lower than the rates fixed by the government. “Due to higher production and lower demand, we have been selling the products at lower rates.
The government has fixed Rs 4,000 for per unit of gravel, and `5,000 and Rs 6,000 for per unit of m-sand and p-sand, respectively, a few years ago. But the prices will increase if the government continues to close down quarries,” he warned. He also suggested that the government condone the violations and liberalise the rules.
W S Habib, president of CREDAI - Tamil Nadu (Confederation of Real Estate Developers’ Associations in India), said the crisis will not only slow down ongoing projects, but it will also lead to job losses.
Arguing that the demand for m-sand and p-sand have gone up due to the ban on river sand mining, Sella Rajamani, president of Tamil Nadu Sand Lorry Owners Federation. He said, “The state can get a huge quantity of river sand if it desilts 30 big dams that are not desilted for decades.”
In Madurai where the price rise has been more modest — about Rs 200-Rs 500 per sq ft — than in the capital, G Elangovan of BAI, Madurai chapter said the additional burden is largely being absorbed by builders. Certain ancillary expenses and unofficial costs prevalent in the past have reduced in recent years. This has helped offset a portion of the increased expenditure, said a few other builders in Madurai.
Shunchonngam Jatak Chiru, secretary of natural resources department, said the government is taking steps to address the issue.
(With inputs from Vivanesh Parthiban in Tiruchy and MS Thanaraj in Madurai)
