Revise procurement prices of construction raw materials

Contractors of infrastructure projects yesterday demanded the government increase the procurement prices of construction materials as the current market prices of key ingredients are higher than the government rates.

They also urged the government to update its purchase rates for the various materials government procuring agencies buy through tenders.

"The price of all construction materials increased from 25 to 45 per cent depending on the item in question," said Sheikh Md Rafiqul Islam, former president of the Bangladesh Association of Construction Industry (BACI), a trade lobby group for firms that mostly work for the state-financed construction projects.

Islam's comments came at a press conference at the Dhaka Reporters Unity in the capital.

BACI went on to demand the inclusion of water and electric bills with the schedule of the Public Works Department.

Islam said the prices of almost all construction materials, including steel and iron products, stone chips, cement, bricks, sanitary and electrical items, have risen thanks to increased demand amid the reopening of economies worldwide.

Besides, labour cost increased by 60 to 70 per cent based on geographical location. Similarly, transport costs will go up in line with the price hike of oil.

In this situation, if it is not possible to stop the trend of abnormal price hikes, all construction work will come to a standstill and project implementation will become impossible, Islam said.

Project implementing agencies usually place work orders for the required materials at fixed rates from construction companies that do not adjust the price in spite of changes in the market. But there is an option to adjust prices with rate escalation for foreign companies, he added.

Shafiqul Haque Talukdar, president of BACI, said implementation of the annual development programme will be affected if the situation does not change.

In addition, many of the roughly 50 lakh people employed by the construction sector could lose their jobs.

"Even the contractors will fall into bankruptcy as they will fail to make repayment of their loans," he said, adding that financial institutions will face huge losses as a result.