ISLAMABAD: A delegation of contractors association of Pakistan
(CAP) has fornally conveyed to the government that work on thousands of on-going public sector development projects has either halted or its close to shut down due to unmanagable increase in cost due to rising cost of steel and other components of construction industry. The CAP delegation, headed by chairman Kamal Nasir Khan, told the government authorities in a meeting held here on Friday that in the given scenario when cost of construction has gone up by 60 % to 80 % in the last one year, the contractors, who are basically service providers, can not afford to carry on work on public sector development projects. The CAP delegation made different proposals to the governnent side during Friday’s meeting like adjustment in projects allocation on the basis of inflation or revisting of formula to compensate the contractors as per Musharraf’s time formula. The CAP delegation argued during the meeting that delay in reaching to any adjustment formula may simply halt thousands of on-going public sector development projects and cause loss to the national exchequer of trillions of rupee.
The CAP representatives had a long discussion with deputy chairman Planning Commission last week to work out some strategy to bring the authorities on some adjustment formula. Friday’s meeting was basically continuation of the last week meeting to sort out the problem.
The CAP’s arguments on surge in cost of construction has logic. Take steel, cement, cable anything used for construction, their prices have almost doubled in last one year. Steel per ton price has gone up from Rs 0.1 million in November 2020 to Rs 0.195 m, almost double, in November 2021. Surge in price of scrap in global market and rising dollar value are two main reasons of such a big jump in steel prices in domestic market. But can one believe that cement which consumes local raw material like limestone etc would jump from Rs 430 a bag in November 2020 to Rs 700 plus in November 2021. Its cartelisation of cement industry that made winfall, rather unlawful profit, on cement prices. Interestingly, prime minister, Imran Khan, who keeps on claiming of bringing revolution in construction industry, had no time to check what dirty game the cement manufactuerers were playing with his beloved construction industry since November 2020. Neither the prime minister nor his buddy and policy wizard , Asad Umar, noted as to why Competition Commission of Pakistan (CCP) did not take notice of cartelisation of cement manufacturers for over one year.
The same is the story with other manufacturers of cables, wood, and other items used in construction work. Every industry fleeced the buyer when its cunning owners saw some activity in construction sector.
How much the goverment is serious in sorting out the contractors rightful demands of adjustment can be guaged that Asad Umar, the main decision maker to bail out the CAP in this difficult time, listened to the contractors delegation via skyp when he was sitting in his office just one and half kms away from the venue of their meeting with deputy chairman Planning Commission on Friday.
“We have been asked by the government side to come again next week to find out a solution to the problem”, a CAP member told NEWSMAN after the meeting on the condition of anonymity.
