Cement sector cartelised, says BJP

The six to seven big cement companies are raising the prices of cement by indulging in cartelisation with the help of some Central ministers and they have earned profit of around Rs 4,000 crore by unethical ways, alleged Maharashtra BJP president Nitin Gadkari.

Addressing a press conference on Wednesday, Gadkari said, in January 2006 the prices of cement hovered around Rs 164 per bag. In just 14 months, it has increased to Rs 241 per bag and this has resulted in the rise in the prices of housing stock. The costs of many important infrastructure projects have also escalated significantly. Ultimately, this burden will be passed on to the common man."

As per the Centre's directives it has become mandatory for cement companies to mix 22 per cent of fly-ash in cement and this fly ash is given to cement companies free of cost by the thermal power generation units.

But, the cement companies do not pass on this benefit to the consumers, he alleged.

The price differential between the cement which contains fly-ash (pozzolona portland cement - PPC) and which doesn't (ordinary portland cement - OPC) is only Rs 2 per bag.

However, these big cement companies only distribute the PPC in the market and pocket huge profits.

This tactic of distributing PPC in the market has resulted in raising the prices of ready mix concrete (RMC) which is essentially used in many infrastructure project like bridges, roads, dams, he claimed.

Elaborating on this point, Gadkari said, earlier the RMC manufacturers used OPC and then they used to mix it with the fly-ash and this used to keep prices of RMC at reasonable levels.

But as there is no OPC available in the market, RMC manufacturers have to buy PPC and because of which RMC prices have risen 20 per cent in Mumbai and adjoining areas.

In his Budget speech P Chidambaram took much credit for reducing the import duty on cement but consignments of cement from Pakistan and South Korea were sent back from Mumbai port on grounds that they did not have ISI mark on them.

This is absurd and this was done to benefit these big companies on the orders of his ministerial colleague, he charged.

He further said, on behalf of consumers I have filed a petition with the Central Consumer Redressal Forum demanding that the monopoly practices adopted by these companies should be broken.

And sent the copy of our petition to the Prime Minister's Office (PMO), finance ministry and parliamentary standing committee on consumer affairs.

Besides, we have made certain demands like bringing cement and steel under the essential commodities list, ban on export of cement, central and state government should announce new policies which will lead to capacity addition in cement sector and a committee should be appointed to monitor the prices of cement and steel at Centre, in letter sent to PMO.

Even if cement is sold between Rs 95 to Rs 105, cement companies' profit will not be less than 40 per cent, he claimed.