Construction cost goes through roof- The New Indian Express


Express News Service

VIJAYAWADA: An abnormal increase in the prices of building and construction materials in the last three years has put builders and contractors in a fix. According to CREDAI, which did a survey on the price rise of building materials before and after the Covid pandemic, there has been an increase of 35-40 percent in the cost of raw materials. Nearly 250 products such as iron, cement, sand, cables, and fixtures are used for building construction.

Speaking to TNIE, K Subhash Chandrabose, general secretary CREDAI – Andhra Pradesh, who conducted the survey, said since October, there were severe fluctuations in the cost of raw materials for buildings and the construction sector under the impact of the Russia-Ukraine conflict, coal crisis, power crisis, abnormal increase of fuel price, among other factors.“In general, during the summer season, construction activity would be more. However, during this summer, there was a 40 per cent decline in construction activities than normal,” he pointed out.

According to him, prices of the raw materials used in the primary stage of construction — like steel, cement, sand –  increased by 30-70 percent between March 2020 and October 2021. A tonne of steel, which was priced between Rs 43,000 to Rs 46,000 before March 2020 was priced between Rs 67,000 to Rs 70,000.  A bag of cement which was priced anywhere between Rs 230 and Rs 260 before March 2020 was priced between Rs 370 to Rs 400. Sand, which used to cost Rs 3,500 per unit (4.5 tonnes) before March was priced at Rs 3,500 to Rs 4,000 per unit after October 2021. Similarly, prices of bricks and RMC, aggregate and RMC have increased by 30 to 50 percent, raising the overall construction cost. “In fact, after October 2021, the prices have increased further owing to various other factors such as fuel price hike, power and coal crisis,” he said. Fuel price fluctuations had a cascading effect on the prices of every product and building raw materials were no exception. 

Even the prices of the raw material used in the secondary and later stages of construction like electrical cabling, fabrications, putty and painting, plumbing, UPVC windows, glass panes, sanitary, wood for flooring, walls (partition) doors have increased from anywhere between 10 to 65 per cent.“Though there was a reduction in fuel prices recently, it has not brought down the prices of raw materials. There was a marginal reduction in the prices of a few raw materials,” Bose pointed out. 

It goes without saying that the increase in prices of different raw materials increases the overall cost of the construction and builders will not bear the additional financial burden and it would be invariably put on the end consumer. If there is an abnormal increase in prices of construction and completed structures (houses and apartments), the demand will get affected. “Only way to address the issue is to regulate the prices of the raw material, which can only be done by the government be it at the state or central level,” CREDAI state general secretary observed.



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