Country's construction companies are struggling to implement development projects within the estimated budget due to the increase in expenditure, alleged the sector insiders in a meeting on Wednesday.
“In addition to the sky high prices of Scrap and chemicals, the main raw materials of steel, container and ship fares have also increased in the last two years, which resulted into further increase of production cost of rod having adverse impact on the country's construction sector”, they opined.
Bangladesh Steel Manufacturers Association (BSMA) and Bangladesh Association of Construction Industry (BACI) held a meeting jointly at FBCCI office upon the said perspective. BSMA leaders informed, the price of rod produced in the country has logically increased due to increase in the price of raw material in the world market.
At present, Scrap costs 79 percent additional expense, resulting in overall production costs increased by 52 percent. In contrast, the selling price has increased by only 37 percent. According to the producers, the rod has to be sold at a loss in most cases as the selling price has not increased as compared to the increase in the price of raw material in the world market.
Currently, the selling price of per metric ton rod is 78,000 taka, while the same in West Bengal, India, costs 86,000 taka, the BSMA Leaders added.
At the meeting, the steel producers said that if the construction companies were allowed to import rods, the domestic industry would suffer and a large number of people would lose their jobs. In such a situation, BSMA demanded reduction of all existing duties and taxes on scrap and sponge iron imports for local manufacturers.
At the meeting, BACI leaders said that the government procurement rules-PPR and circular issued by the CPTU allow price adjustment in government projects. But most of the government-funded projects did not include price adjustment clauses in their contracts.
As construction materials become more expensive, contractors are losing out. The Bangladesh Association of Construction Industries (BACI) has called for price escalation of government projects considering the rise in prices of raw materials.
Chairing the meeting, The FBCCI President Md. Jashim Uddin called for resolving the problems in the construction sector through mutual cooperation and dialogue.
Mir Nasir Hossain, former president of FBCCI, joined the meeting online. Also present were FBCCI Senior Vice President Mostofa Azad Chowdhury Babu, Director Engr. Ghulam Mohammed Alomgir, Secretary General Mohammad Mahfuzul Hoque, BSMA President Manwar Hossain and BACI President Shafiqul Haque Talukder.
