NOIDA/ GURGAON: To control the cost of construction and make home prices work for the common man, the Confederation of Real Estate Developer's Associations of India, Credai, has moved the Competition Commission of India (CCI) against Cement Manufacturers who have been unduly increasing the cost of cement. Credai has also highlighted the violation by cement manufacturers of the Commission's "cease and desist" order of 2012. The 2012 order of CCI had held that the cement manufacturers had formed a price cartel and were fined close to Rs6000 crores by the regulator.
In its submission to the Commission, Credai has pointed out that the cost of raw material used in manufacturing the cement has come down from January 2015 to September 2015 but cement companies never passed on this benefit to their customers. Instead, they seemed to be working together in controlling supply and prices.
Earlier in the month, Credai NCR Board has unanimously decided to procure cement from the companies like Ultratech, Lafarge and others. All the members of Credai NCR agreed to implement the ban. The decision took effect in the Delhi, Noida, Greater Noida, Gurgaon, Ghaziabad, Yamuna Expressway, Raj Nagar Extension, Faridabad, Neemrana and Bhiwadi.
"Till two months ago, the builders were buying cement at Rs200 per bag, suddenly the price has gone up to Rs300 per bag, how can the builders adjust such huge increase in prices? The increase is unjustified and the 220 Credai members of NCR have boycotted some cement suppliers," Manoj Gaur, President, Credai NCR said.
Despite the low demand, the prices of cement have jumped by 20-40 % in top cities pan India in the last couple of months. "It is notable that the cost of raw material for cement production has come down significantly during January, 2015 to September, 2015. It is unfair that the cement manufacturers indulge in practices that control the prices of cement. CCI has warned the Cement Manufacturers Association in the past as well but it is unfortunate that they seem to be continuing with their price and market manipulation," Getamber Anand, President, Credai National said.
The confederation complained that there seems to be no grounds for supply restriction and the recent price increase in cement given the low demand. The confederation also brought to notice the Commission's order dated June 20, 2012 wherein cement manufacturers were directed to 'cease and desist' from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market.
"In that order the commission had determined the penalty amount on various cement companies. However, various cement manufacturers challenged the order before the Competition Appellate Tribunal that chose to grant stay to the penalties. But the Appellate Tribunal did not find anything wrong in the order of 'cease' and 'desist' which continues to operate till date," Manoj Gaur added.