All Pakistan Contractors Association (Apca) on Thursday announced to abandon all development projects in hand against what its office-bearers called here at a press conference 'unprecedented hike in steel prices'.
Apca Chairman Engineer Sikander Khattak and Secretary Yunus Khan told mediamen that the increase had made it impossible for the contractors to carry on work at their projects.
Khan said, "It was next to possible for even A class contractors to keep on work at any project since it could cause them loss of million of rupees.
He quoted three cases in support of his arguments. First-Builders Associates Lahore, second Potential Engineers Lahore and third-Imperial Construction Company again another Lahore-based firm and according to him loss in each of these cases in one item-steel- was ranging between Rs 22 million to 51 million.
"How any contractor could compete his job when loss was such huge and there was no sign of any improvement in the situation arising out of steel price hike", he questioned.
Khan claimed that steel prices had gone up to Rs 55000 a tonne in the first week of March and now these were ranging between Rs 32000 and Rs 33000 but still the rates were unaffordable for contraction work.
The Apca office bearers demanded 15 to 25 percent compensation to construction contractors from retrospective effect at the market rate of steel instead of rate of billet of Pakistan Steel Mills.
They wanted relaxation in contracts, which specified that Pakistan Steel Mills billet steel will be used for all mega sector. They were convinced that the clause was helping Pakistan Steel Mills to establish its monopoly.
The Apca demanded that permission of steel import at zero rated duty and taxes to save construction industry from any destination including India.
The association was not satisfied with the present mechanism of compensation. Its members said in most of the contracts escalation clause does not exit and if it exits, it's given on the successful completion of the projects. Only a fortunate contractor gets escalation.
National Housing Policy 2001 which was approved by the Federal Cabinet provides that as a priority measure there will be a drastic reduction in the duties and taxes of steel and cement.
It is regretting that against the policy steel was witnessing 300 percent increase in its rates. In the United Nation report of 1997, it has been accepted that it is the housing sector only, which has 118 linkages. It is an accepted norm from time immemorial that development of infrastructure provides jobs to millions of unemployed work force.
Apca office bearers recalled that cement was also showing continuous increase in its rates despite the fact that almost all the cement industries have shifted from furnace oil to coal during the last one year or so and there cost of production has gone down.
Usmani, one of the Apca member, said cement manufacturers were indulged in unlawful activities by forming cartel to mint unjustified profit but all was going without any action on the part of the government.
He wanted that the government should take immediate action against all those who were making hostage to the construction industry by increasing price of their product without any solid reason.
The Association feared that in case the government failed to take immediate bold steps to reduce the steel prices the economic gains and employment may suffer a serious jolt. The Apca office bearers said they had cautioned the policy makers about serious steel situation and hence its price hike well in time but to of no avail.