December 02, 2008

Building contracts unviable due to price hike

The Post reported that All Pakistan Contractors Association has declared that in view of the unprecedented escalation in the prices of essential building material, the contracts signed for various projects are no more viable.

An emergent meeting of the association held recently reviewed the whole situation and decided to approach the new government to express their helplessness in executing various projects.

Pointing out the problems of the contractors, the meeting noted that the cost of steel products like ingots, billets, steel bars has risen by about 60% to 80%. According to builders, the steel products alone were not allowing them to dare accomplish their projects. They said that it was not steel products , the increase in transportation charges, cement and labor all have put together to cover the building industry.

Explaining the current situation, one builder highlighted that the steel bars which were costing PKR 40000 per tonne were now available for PKR 84000 per ton. He said, such an unusual jump was not allowing the contractors to execute projects because the cost of products has escalated for more than the amount agreed in the contracts.

They were unanimous in their opinion that if timely measures were not taken, the building sector and all the areas of construction industry would be hit badly.