Gadkari’s ambitious road plan seeks 40% price cut from cement makers
Ministry of Road Transport & Highways and Shipping is holding parleys with cement industry leaders to negotiate a huge cut in cement prices to start Rs 3 lakh crore worth infrastructure projects, including highways’ building and ports’ construction. The move comes against the backdrop of Union Minister Nitin Gadkari announcing the new Government’s intention of building all new roads using indigenously manufactured cement, replacing the more expensive and imported bitumen.
Sources in the ministry said that Gadkari has also warned the cement majors in the country from forming cartels. Gadkari said that he will not tolerate cement companies limiting and controlling supplies in the market and determining prices through an anti-competitive agreement. “Cartelisation is not only unfavourable to the cause of the consumers but will also adversely affect the country’s economy as cement is an integral part of all construction activity and infrastructure industry. Moreover cement is vital to the economic development of the country,” said a ministry official, claiming to echo Gadkari’s view on the subject.
In a meeting with stakeholders earlier this week, Gadkari said that he was holding onto cement projects worth Rs 3 lakh crore, but would give them a go-ahead, if the cement companies desisted from forming cartels. “The new Government has decided to go for cemented roads as they can now be four per cent cheaper than bitumen roads. I have spoken to four cement companies to consider this and have warned industry not to form a cartel and raise prices,” he said.
“Gadkari is in talks with cement companies to give us good rates. If we give them volumes, we can also press them for 30 to 40 per cent discount from the current prices,” said a source in the Ministry. The Minister has repeatedly announced the new Government aspiration of building an average of 30 km highways daily.
The Government intends to get stalled highway projects worth Rs 1,80,000 crore started after removing hurdles like delays in land acquisition and green nods latest by August 15. The NDA-led Government has also given its nod for building 16 new ports. Finance Minister Arun Jaitley has set aside Rs 11,600 crore in the Budget for developing outer harbour Tuticorin Port.
New projects worth Rs 2 lakh crore are in the pipeline in the roads and port sector, which will be given out in this year itself. “Detailed project report is being drafted for these projects worth Rs 2 lakh crore. Soon after it is ready, we will initiate the required steps for acquiring land and getting forest and environment clearances,” Gadkari said in a meeting on Tuesday.
“After two years, roads and port sector will help India’s GDP, which is now at 4.5 per cent. It will see a growth of at least by 2 per cent in the roads and shipping sectors,” he said.