Maharashtra: As raw material costs skyrocket, builders threaten to halt construction

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The apex body of over 3,000 builders in Maharashtra, CREDAI, on Saturday threatened to stop work at its construction sites owing to the steep rise in rates of building materials which may directly impact the prices of flats and delay the possession schedules promised to the buyers.

In a strong statement, CREDAI Maharashtra President Sunil Furde said that the prices of cement, steel, sand, bricks and all other necessary building materials have been steadily escalating since over a year and have now skyrocketed to unaffordable levels.

The prices of steel -- the most important building component -- has doubled from Rs 42,000 per tonne to Rs 85,000 per tonne now, cement bags have shot up from Rs 260 to Rs 400, cost of four-inch brick has increased from Rs 6,500/1K to Rs 8,000/1K, sand has escalated from Rs 6,000/brass to Rs 7,500/brass, while wash sand has gone up from Rs 3,800/brass to Rs 4,800/brass, Furde said.

"Besides, the cost of all other materials like electric wires, fittings, tiles, pipes, sanitaryware, fabrications, secondary minerals, and labour charges have also shot up by around 40 per cent. With such high rates, we cannot afford to build houses. So all CREDAI Maharashtra members are planning to shut down all building activities," he said.

The CREDAI has shot off a letter to the Maharashtra government, including Deputy CM and Finance Minister Ajit Pawar and Revenue Minister Balasaheb Thorat, seeking to verify whether the increase in raw material costs "is natural or due to hoarding for profiteering" during the pandemic lockdown period.

The CREDAI has also urged the watchdog, Maharashtra Real Estate Regulatory Authority (M-RERA), to extend the completion deadline for the closed projects.

Furde said that apart from the rising costs of raw materials, the proposed 1 per cent Metro Cess to be levied on all property purchases in Mumbai, Pune, Thane and Nagpur from April 1 will further hit consumers planning to buy a house, and urged the state government to reconsider or defer the move by at least two years.

Though CREDAI has not indicated a date to shut-down the ongoing projects, there are over 10,000 active construction sites in Maharashtra, employing over a million people as direct or indirect labourers.

Any such closure of works could result in a minimum delay of six months, and the flat-buyers would be saddled with an additional cost of Rs 500-600 per square foot, throwing haywire their loans and repayment schedules, said industry players.

Furde said that the prices of raw materials escalated immediately after the first Covid wave in 2020, and has shown an upward trend ever since.

CREDAI - barring the MCHI in Mumbai - has a total of over 3,000 big and small realtors as members spread across 61 cities and urban centres in the state.

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