B Raja Srinivas, chairman of Credai, Vizag Chapter
Visakhapatnam: Apartment builders in Visakhapatnam are postponing their new ventures due to a hike in sand and cement prices.
Though local builders had secured all necessary approvals for the construction of more than 100 apartments in and around the city some four months ago, they are yet initiate any work on the projects due to the uncertainty mainly in sand and cement prices, B Raja Srinivas, chairman of Credai, Vizag Chapter, told Business Standard.
The increase in cement and sand prices had eroded their margins by 30 per cent on the existing projects. The builders say if the situation continues they may have to raise the price of their projects by Rs 250-300 per sft.
Some two months ago, cement was available at Rs 230 per bag and now it has climbed to over Rs 280.
Prior to the new sand policy in Andhra Pradesh, sand was available at Rs 17,000-18,000 per load (5.5 units) but now the same is costing Rs 30,000-32,000 per load, he said.
Currently, more than 5,000 units (flats) are under construction. The builders complain that the buyers are not willing to pay the difference in construction (Rs 250-300 per sft) cost in spite of the clause in the agreement.
The Credai has represented to the government on sand and cement prices. "Most of the builders have decided to start new ventures in the next one or two months. Meantime, if sand and cement prices do not come down, we will increase the price of the flats by Rs 250-400 per sft depending on the locations," he said.