KARACHI: A day after the Public Accounts Committee (PAC) was told that contractors stopped working on all government-funded housing projects months ago because of cost overruns due to increase in cement and steel prices, the cement manufacturers in the north region have increased cement prices by Rs10-15 per bag.
The fresh increase in cement prices will be effective from Friday, according to a tweet from Topline Securities, a brokerage. It said, “The new price in the north region is in the range of Rs760-765/bag.”
The cement manufacturers are of the view that prices have been increased to absorb the impact of rupee depreciation and rise in international coal prices.
Contractors have halted work on government-funded housing projects for months because of cost overruns, despite claims that there were no “price increases”, the Public Accounts Committee was informed on Thursday.
Housing Secretary Dr Imran Zeb informed the committee that the development of the housing programs had been stopped due to an ‘unprecedented’ rise in cement and steel prices during August last year.
The comments were made during the review of the Housing and Works Ministry audit report by the Public Accounts Committee.
Zeb said the contractors wanted a cost reduction which the housing ministry rejected as the new prices exceeded the PAC and Public Procurement Regulatory Authority benchmarks and the rules that applied.
According to the laws, Auditor General of Pakistan (AGP) Muhammad Ajmal is required to pay the difference due to cost increase. Ajmal said that further delays would increase the costs of the project even further.
The housing secretary said that contractors had pitched to pay the vendor directly for the materials. He added that the Federal Government Employees Housing Authority is currently working in Islamabad, Rawalpindi and Lahore.
Last month, Prime Minister Imran Khan said that the housing authority’s Kashmir Avenue Apartments project had not been finished. The PM had arrived without any announcement and found that there was no one at the construction avenue.
All Pakistan Cement Manufacturers Association (APCMA) said on Thursday that cement supply continued declining in February with a 4.75 percent decrease mainly due to increase in cost of production amid surging coal prices and shortage of containers for exports.
According to the data released by APCMA, total cement despatches during February 2022 were 4.36 million tonnes against 4.57 million tonnes dispatched during the same month of last fiscal year. The cement dispatches have been showing a declining trend for the past few months.
The local cement dispatched by the industry during the month of February 2022 were 3.95 million tonnes compared to 3.96 million tonnes in February 2021, showing a reduction of 0.17 percent. Exports dispatches suffered a massive decline of 34.18 percent as the volumes reduced from 616,030 tonnes in February 2021 to 405,489 tonnes in February 2022, said the APCMA.
