Credai makes a strong pitch to govt to bail them out as war raises construction material prices

Andhra Pradesh chapter of Credai has sought the immediate intervention of the government to come to its rescue due to rising cost of building materials mainly due to the ongoing war in West Asia.

Credai AP president Bayana Srinivasa Rao and chairman Buddiga Srinivasu said the current international conflict, particularly the volatile situation in West Asia is dealing a big blow to the construction sector in the Telugu-speaking States of AP and Telangana. Over the past few months, the extraordinary surge in raw material prices has left both builders and common homebuyers in significant distress.

Credai AP has brought the alarming conditions to the government's immediate attention, attributing the primary reason for price rise to surging fuel costs: Rising crude oil prices in the international market have led to a massive spike in transportation costs, making the delivery of cement, sand, and bricks significantly more expensive. On supply chain disruptions, Rao and Srinivasu said due to the war, imports of raw materials essential for manufacturing steel and aluminum have stalled. This has also led to a shortage of glass, PVC pipes, and electrical wiring. Referring to impact on ceramics and tiles distribution, they pointed out that increased costs of Liquefied Natural Gas (LNG) have forced a cut in tile production, leading to a sharp price hike of 20 per cent to 35 per cent.

A comparative price analysis by Credai says the gap between pre-war and current market rates is staggering: Cement price per bag: Before war declared Rs240 and present rate Rs300. Steel price per tonne, which was Rs50,000 before the war broke out, has now gone up to Rs70,000.

Credai appealed to the authorities concerned to consider their plea as the construction industry provides a livelihood for approximately 250 allied sectors. If this sector collapses, millions of workers will lose their employment. "Therefore, we earnestly request the government to regulate material prices and take immediate steps to implement price control measures on essential raw materials," Rao ad Srinivasu stated.

They sought offering tax rebates or a reduction in registration charges to provide breathing room for the construction sector and maintain strict surveillance to ensure companies do not create artificial shortages under the pretext of price hikes.