Development Projects In Cold Storage
Development Projects In Cold Storage In Greater Noida Due To High Prices of Building Material
Sharp rise in prices of building material appears to have put quite a few development projects in cold storage in Greater Noida. The current prices of cement and steel have become a big problem for the construction companies.
The cost of construction has reportedly increased by 30 per cent during past three months, stalling work on numerous projects. In Greater Noida alone, projects worth crores of rupees have been put into cold storage. Prices of cement, steel, diesel, petrol and other materials have been hiked, which in turn have adversely impacted a number of projects.
According to the secretary of NCR Construction Management Association, Kuldip Singh, six months ago the construction cost per sq ft was at Rs 700 which had risen to Rs 830 per sq ft by March 2008 and now it stands at Rs 910 per sq ft. It has made completion of works, the tenders for which were procured three to six months ago, an impossible task. Construction companies have been forced to suspend the work and await the fall in prices of construction material.
The MD of a construction company said the value of the government tenders cannot be hiked, while the prices of construction material like steel, cement, etc have continuously been on the upswing for the last six months. Six months ago a 50 kg cement bag used to cost Rs 170 which is today selling at Rs 260. Similarly the rate of 10, 12, 14, 16 m iron rods (sarya) was Rs 28,000 per tonne which has now touched Rs 38,000 per tonne. The increased prices have adversely impacted the projects under construction.
The worst effect is being felt by the real estate business. The prices of houses, flats and apartments are fixed before these are allotted. The rates fixed six months ago have now increased by about 30 per cent.
The agencies, at their level, have adopted the route of stocking material to tackle the situation. High consumption and imbalance in production have resulted in continuous increase in prices.
The Central government is understood have proposed reduction in the steel prices by Rs 4,000 per tonnes and for a cement bag by Rs 20. But according to sources, the nominal reduction in rates is not likely to improve the situation much.
Sharp rise in prices of building material appears to have put quite a few development projects in cold storage in Greater Noida. The current prices of cement and steel have become a big problem for the construction companies.
The cost of construction has reportedly increased by 30 per cent during past three months, stalling work on numerous projects. In Greater Noida alone, projects worth crores of rupees have been put into cold storage. Prices of cement, steel, diesel, petrol and other materials have been hiked, which in turn have adversely impacted a number of projects.
According to the secretary of NCR Construction Management Association, Kuldip Singh, six months ago the construction cost per sq ft was at Rs 700 which had risen to Rs 830 per sq ft by March 2008 and now it stands at Rs 910 per sq ft. It has made completion of works, the tenders for which were procured three to six months ago, an impossible task. Construction companies have been forced to suspend the work and await the fall in prices of construction material.
The MD of a construction company said the value of the government tenders cannot be hiked, while the prices of construction material like steel, cement, etc have continuously been on the upswing for the last six months. Six months ago a 50 kg cement bag used to cost Rs 170 which is today selling at Rs 260. Similarly the rate of 10, 12, 14, 16 m iron rods (sarya) was Rs 28,000 per tonne which has now touched Rs 38,000 per tonne. The increased prices have adversely impacted the projects under construction.
The worst effect is being felt by the real estate business. The prices of houses, flats and apartments are fixed before these are allotted. The rates fixed six months ago have now increased by about 30 per cent.
The agencies, at their level, have adopted the route of stocking material to tackle the situation. High consumption and imbalance in production have resulted in continuous increase in prices.
The Central government is understood have proposed reduction in the steel prices by Rs 4,000 per tonnes and for a cement bag by Rs 20. But according to sources, the nominal reduction in rates is not likely to improve the situation much.