Taking cement companies head on, Minister of State for Road Transport and Highways VK Singh on Friday blamed cartelisation by the industry for high prices of cement that has led to higher cost of road construction. The minister said that the road sector could buy out bulk of the cement should its prices be lowered.
"Cement industry is not looking at it from the point of view of constant profits. They are looking at a typical Indian mentality -- make your profits once for all. They don't want to bring down the price," Singh said while speaking at a FICCI event.
"If they bring down their price, road infrastructure is going to buy out most of the cement from them at a price at which we want. But they have gone into cartelisation, which is not good," the Minister added.
Road builders have often complained of high cement prices and accused manufacturers of indulging into cartelisation. A private highway contractor said that in states like Tamil Nadu, West Bengal and Maharashtra there were issues related to supply of cement due to localised lockdown but situation is now getting better.
While warning cement firms against cartelisation, VK Singh urged highway developers to find other innovative ways to reduce cost of construction.
"One thing which Nitin Ji (Senior Minister Nitin Gadkari) has also told you all and which I feel very passionate about is that we all need to work together to bring down the cost of road construction. Keep your profits but bring down the cost of construction. There are many things which are available. There are many ways that can be done. What I think needs to be encouraged is innovation and experimentation to bring down the cost. I think somewhere we are a little hidebound," the Minister said.
Even as pandemic-triggered lockdown slowed down pace of highway construction in the country, Road Transport Ministry has kept its target high for the current fiscal and has taken a number of measures to accelerate construction.
The apex highway development agency National Highways Authority of India (NHAI) has decided to bid out projects of about 4,500 kms in FY21.
To ease the liquidity crunch and ensure cash flow to the contractors, NHAI disbursed Rs 10,000 crore to contractors during lockdown in March 2020 using digital platforms. In the first quarter of current fiscal it cleared dues of more than Rs 15,000 crore to the vendors.
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