The overall economic meltdown and inflation are taking toll on construction industry as they have led to higher construction costs, making it unfeasible for the builders to continue with their ongoing projects. A recent survey says that a work on number of mega residential and commercial projects in the city has come to a standstill due to high prices of iron bars, cements, concrete, bricks and other construction material.

The Steel bar commonly known as Saia prices have risen alarmingly to record  high of Rs291,500 per tonne, as compared to 210,000 per tonne in December last in the wake of Letter of Credit crisis which has resulted i shortage of raw material , rendering the steel bar makers unable to produce the iron bars.

Association of Builders and Developers Chairman lamented the unprecedented rise in construction material prices,  the builders and developers have no other option but to close work on their projects costing billions of rupees loss on the industry while at the same time,  thousands of labour force engaged in the construction sector have been rendered jobless due to half of work on projects due to increasing prices of construction materials, particularly the steel bars commonly known as saria.

On the other hand, the cement prices have also risen. That’s why the builder associations have appealed to the government to let them import construction materials from other countries on the basis of barter trade.

The construction sector is on the verge of collapse and it is feared that builders and developers may move to other countries.

The ongoing Letter of Credit crisis together with political instability, Pak rupee’s losing streak against US dollar and unprecedented inflation are serious impacting the construction sector along with other walks of life.

 The cement manufacturers have lamented that they are faced with serious problems due to the difficulty in opening the letters of credit (LCs), which they need for import of coal and other consumable items needed for the smooth operation of cement plants, which have affected their production badly leading to supply disruptions and it is feared that if the situation persisted, the factories may will face closures.

On the other hand, price of sand (Bajri) has almost doubled, jumping from Rs50 per cubic foot to Rs90 per cubic foot. Same is the case with crush prices which is used in construction industry.

With the continued losing streak of Pak rupee which has depreciated massively, the construction cost is mor than doubled in recent months while it is feared that the construction cost may further rise in coming months.

 Association of Builders and Developers (ABAD) laments that since the builders work on three and five years plans usually, but the cost of construction has almost tripled during the last three years and now the cost of the ongoing projects has exceeded by multiple times, so from where the builders will revenue generate money to complete their ongoing projects.

For instance, an average builder who needed 4000 bags of cement for construction of roof of his ongoing building projects, is now in fix to complete the project because now he will pay more than double for this amount of cement as prices have increased.

They say that they have never witnessed such a massive increase in prices of construction material during the last fifty years.

One is not sure when the things are going to settle down and Letter of Credit crisis is solved so that thing move in the right direction.

Rupee, which has touched at a record low of 275 to US dollar in the market, is continuing its losing streak and it may remain under pressure till the IMF bail-out.

Everybody knows that our country was devastated by unprecedented monsoon rains and subsequent floods from July to September last when one third of the country was underwater, wreaking havoc with the lives, houses and other infrastructure countrywide, resulting in damage of over two million homes besides causing the deaths of  1,700 people across the country.

Though the entire country was badly affected by the summer floods but the Sindh province was the most affected as can be witnessed in the form of huge damages to the housing, schools, dams, roads, hospitals, dispensaries, shops and railways tracks and dams.

According to UN report, more than 33 million people of Pakistan are were either rendered homeless or their homes, hotels and shops, offices etc partly damaged by the summer floods. The report further said that over eight million people were rendered completely homeless by the summer floods as their houses were washed out by rains and floods.

The number of houses damaged by floods is said to be 2.2 million while 13 per cent of these damaged infrastructure were health facilities while over 8,000 kilometers of highways, roads and railway tracks and 440 bridges were also destroyed by the devastating floods.

So, the country is faced with double trouble. On the one hand, the infrastructures and houses damaged by floods need to be reconstructed and repaired while on the other hand, the construction prices have escalated beyond imagination, making it difficult for the builders and other stakeholders to continue with the construction work.

Published in The Daily National Courier, February, 06 2023

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