Unfairly high

January 23, 2018 02:00 AM Republica


Construction materials price  

As construction season begins, the price of cement, iron rods and corrugated zinc sheets have skyrocketed this year as well, like in the previous years. Some of our businesses do not hesitate to make money at any cost, leaving customers in a difficult position. This has created a great inconvenience to millions of earthquake victims who are reconstructing their houses. According to civil works contractors, cement price has increased by 12 percent and steel rods are eight percent more expensive than in the past. They argue that arbitrary price hike has eaten away most of the allotted profits for them and they are at the receiving end of the price hike. But price hike in basic construction materials has multiple and multi-dimensional effects. Let alone the earthquake victims, even the families with moderate income will be unable to construct houses and it will make our infrastructure projects costly.

The government agencies do not seem much bothered despite the finding by price monitoring mechanism that cement price has increased by 10 to 16 percent in capital and other cities while manufacturing cost has increased only by seven to nine percent. This is the evidence of the fact that the hike is not natural. In some of the places, the price of construction materials has been hiked by five times in a period of two weeks. Manufacturers and traders are behaving as if there are no regulators in the market. Government agencies responsible for price monitoring are yet to collect the price of other key construction inputs like steel rods, sand, aggregates, timbers among others, encouraging business people to manipulate the market and even collude to keep the price high enough for them to amass huge profit. Profit may be the key motive for any businessperson but it should not come at the cost of big economic burden to the customers. 

Monitoring team led by the Department of Supply Management and Protection of Consumers Interest has found that cement manufacturers have been overcharging on essential construction prices. It has asked Nepal Cement Manufacturers Association to reduce the price within three days. Such lackluster response won’t work, first because these manufacturers are reluctant to obey the government orders and then they reduce it minimally even if they do. The government should take strong action against those traders who are fleecing consumers by overcharging. Most traders tend to raise prices exorbitantly first and then reduce them by a minimal margin, to hoodwink the monitoring agencies. The government should have its own mobile market monitors to keep manufacturers and traders under surveillance and raid them if they are found charging above price indicators. To start with, the government should revamp its regulatory bodies to monitor the market and punish those who collude to keep the price high. Unfortunately, the government officials in charge of regulatory bodies also become part of the collusion and the businesses escape scrutiny and avoid fines. This cannot be allowed to happen anymore. Common people should not become victims of unfair market manipulation. 

 

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