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Association of Builders and Developers (ABAD) Chairman Hanif Gohar, lamenting on apathy of the government towards construction sector, said that the cement manufacturers of the country are minting money on false pretext of Gas Infrastructure Development Cess (GIDC) and customs duty on coal, while the cement producers of neighbouring countries are selling cement at half the rate to that of Pakistan.

He said that recently, All Pakistan Cement Manufacturers Association (APCMA) Chairman Muhammad Ali Tabba, in response to a letter from ABAD, has categorically said that cement manufacturers are unable to reduce cement prices, as the government has imposed GIDC on gas usage by cement factories and 6 percent customs duty on import of coal.

But the fact is, Gohar elaborated, that there is no mention of GIDC in the GIDC Act, 2015, dully passed by the parliament, on the cement sector. Moreover, responsible officers of Sui Southern Gas Company have categorically said that there is no GIDC on cement factories, he added.

On the other hand, the version of Muhammad Ali Tabba about 6 percent customs duty on coal import is hard to consume, as coal prices in the international market is showing downward trend for last eight years and the coal price has come down from $140 per tonne to current $50 to $53 per tonne. He further said that despite consideration of the duty, the coal is much cheaper now.

The ABAD chairman said that in comparison with neighbouring countries like China, Iran, India and United Arab Emirates (UAE), cement prices are almost half that of in Pakistan. He said that retail price of 50 kg bag of cement is as law as Rs 255 in China, Rs 231 in Iran, Rs 292 in India and Rs 262 in UAE. "It is interesting to note that Pakistani cement producers are exporting cement to UAE, which is being sold at much cheaper rates there than in Pakistan. How cement producers are claiming that they cannot sell cement at cheaper rates, as cement manufacturing is very costly in Pakistan," he questioned.

He said that coal prices of last three years were $81.42, $71.36 and $56.78 per tonne respectively in the international market while currently, the coal price is $50 to 53 per tonne in the international market. On the contrary, he said that the cement manufacturers of Pakistan have raised cement prices during these years. Giving the facts and figures, he said that 50 kg bag of cement was being sold at Rs 481 in 2013, Rs 521 in 2014 and Rs 518 in 2015 and still it is being sold at more than Rs 500.

Gohar said that the government is pressurising the builders and developers to build affordable houses for low-income groups of the country. "We at ABAD also want to provide low-cost houses to people so that they can have their dream houses at least once in life time," he said, adding that it is the duty of the government to keep the rates of main ingredients for construction i.e. cement, steel etc at reasonable level. How can builders build cheap houses while all main materials for construction are being sold at higher and inflated prices, he questioned.

He said that the Competition Commission of Pakistan (CCP) had imposed Rs 6 billion fines on cement manufacturers for cartelisation, but unfortunately the penalty was waved off, giving free hand to cement manufacturers to raise the cement prices according to their will and wish.

He said that in this situation, it is not possible for builders to construct affordable houses. He reminded the government that construction sector is contributing a large chunk in GDP and demanded to control the cement cartel, which is ruining construction industry of the country and damaging the economy of the country.

Source:Dailytimes