Builders for govt control on steel prices

Builders Association of India, a representative body of around 8,000 builders and construction players, today said that the government should immediately intervene to rein in rising steel prices, which accounts for 35 per cent of their raw material cost.

"The price of construction-grade steel has gone up by 70 per cent in the first three months of the year to around Rs 50,000 per tonne from Rs 31,000 in December 2007. If the government does not intervene immediately, all infrastructure projects will come to a grinding halt," BAI General Secretary Anand Gupta said.

Since steel accounts for 35 per cent of the raw material costs, the commodity itself has caused an additional 20 per cent cost push on the building and construction community, which has the horrendous task of building the country's infrastructure and real estate, he said.

The government, he said, should do away with the taxes and duties levied on the steel industry and allow people to import the commodity as freely as possible. There is a need to ban exports of iron ore as well, he said, echoing the clamour of the steel industry.

However, he is critical with the steel makers as well and said that an inquiry should be made on the rising steel prices.

"I just can't understand the reasons behind such a stiff rise in steel price in a short span of three months when the government has not done anything to tamper the existing rates and duties or for that matter, with any policy," Gupta said.

BAI is also in favour of a regulatory body which will have the mandate, among others, for monitoring steel prices on a regular basis.

"The regulatory authority should comprise government officials, steel makers, construction players and economists," Gupta said.

The rise in steel prices may not impact builders in metros, where land is a major cost factor, but will have a severe impact in tier-III cities, where construction cost is equivalent to the building costs, he said.

Gupta said BAI has already made a strong representation to various ministries in the government and hopes a corrective measure will be taken soon.