Builders ask, where’s the cement despite new factory?

An unprecedented increase in the price of cement, building materials and fittings in the past several months has halted many development projects, causing more than 600,000 job losses, industry sources said.

Contractors claimed that the lack of building materials and the manipulation of prices by unscrupulous traders had brought projects to a halt.

The industry employs about 1.2 million minor and white collar workers.

Costs have risen by 75% to

100% as a result of the manipulation of raw material prices.

The Condominium Developers Association said that there is

“absolute chaos’’ in the supply chain.

President Mr Brahamanage Premalal said the market has suffered a double blow, first with the US dollar crisis and then from unscrupulous traders who are profiting from shortages.

The dollar only increased by 35%, but the cost of raw material has doubled and even trebled. There is a wait of up to 18 months for raw material to be delivered even on payment of 60% upfront, Mr Premalal said.

A 50 kilogram cement bag sold for Rs 975, now costs Rs 1,900.

Also the price of steel has shot up from Rs 208,000 to Rs. 300,000 a metric tonne.

He claimed that materials are being hoarded and this has created scarcity and higher prices.

This is despite the opening of a new cement factory in Hambantota on March 8.

Lanwa Cement, claimed an output of 3 metric tons annually.

It is a Board of Investment approved project and is meant to pass on tax concessions to customers.

“But the price of cement has jumped up even further,’’ he said.

In addition, import restrictions on 367 items have adversely impacted the industry.

Mr. Premalal predicts that new homes or apartments will not be built and that prices of homes will skyrocket.

Meanwhile, the National Construction Association of Sri Lanka said price increases and non-availability of building materials coupled with non-payment for work already done had drastically affected the sector.

President Susantha Liyanarchchi said that members mostly involved in development projects including roads, bridges, and buildings for schools find it difficult to continue because of delayed payments from government ministries.

“Around Rs 200 billion is outstanding in payments,’’ he said.

There are delays of up to three months for products from the Building Materials Corporation.

“The authorities should look into the situation and take steps to rectify them.

Or else the whole industry will collapse,’’ he said. Industry regulator, Construction Industry Development Authority, said that with controlled prices on cement being removed it was hard to monitor.

Director Mr Savindra Amarasekera said the dollar crisis and stocks being hoarded have accelerated price increases.

“We are unable to do anything. The Consumer Affairs Authority can step in and control the prices. But it would be a difficult process,’’ he said.