Alarming Rise of Steel Prices Impact Realty & Infra projects
The alarming rise of steel prices in the last 45 days, in all likelihood, will hit around Rs 14,410 crore worth National Highway Authority of India (NHAI) projects in the State, in addition to major State government and residential projects.
The TMT steel prices have increased by nearly 25 per cent in last 45 days. This has resulted in increased cost-estimation for construction projects. Highway activities underway have been severely hit by the escalated prices and delayed delivery of TMT steel.
Now, the project targets set by the Ministry of Road Transport & Highways (MORTH) may not be achieved, said Builders Association of India state treasurer S Ramaprabhu. “The construction costs of residential projects have shot up by around 10 per cent,” he added.
NHAI Regional Officer said that there has been a shortage in supply of steel at construction sites. “We have a provision to deal with price escalation. This might help compensate for the price hike,” he added.
Some of the NHAI projects, likely to be hit, include the six laning of 33 km Chennai -Tada section of NH-5 at a cost of Rs 295 crore, six-laning of Sriperumbudur -Karaipettai (EPC) at a cost of Rs 777 crore and four- laning of TN/Kerala border – Villukuri section in NH 47.
Confederation of Real Estate Developers’ Association of India TN chapter chairman S Sridharan told Express that this price hike may force developers to slow down projects. According to a representation, which has been accessed by Express, the Builders Association of India sent to the Prime Minister, “The TMT steel prices have increased to nearly 25 per cent in just 45 days. The price hike and delayed delivery of the steel severely affect progress of highway projects.”