October 16, 2008

Builders in a fix to complete projects on committed terms

The Dawn reported that soaring steel and cement prices are making it difficult for local builders to complete their projects on committed terms. Cement companies maintain that the high cost of production is responsible for the price hike and believe that cement prices are still lower compared to global rates.

Mr Munir Sultan senior VC of FPCCI Standing Committee on Housing & Construction Industry said that "There has been a rise of 21.9% in cost of construction from July 2007 to April 2008. Though there is some reduction in mild bar prices and presently prices came to around PKR 70,000 per tonne from PKR 82,000 per tonne but much is needed to be done to ease the problems of construction sector."

He said that builders are blamed for using low grade steel in their projects instead of higher grade steel of British Standards Specification to successfully build projects. He said “Pakistan Steel Mill being a public sector giant should devise plans to regulate local steel prices and boost economy instead of making profits. He also urged the government to slash import duty and sales tax on steel products.”

Muhammad Ahmed VC of Karachi Iron & Steel Merchants Association said that people who have started the construction projects have few choices therefore they are taking their projects forward despite the soaring steel prices. In last few months steel sales declined but now they are back on track.