Cement Woes

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The reconstruction boom triggered in wake of September flood aftermath saw black-marketers make millions. Saima Bhat reports how cement rich Kashmir fell prey to demand-supply gimmick

Outside-labours-Fleeing-during-floods-2014After September 2014 flood waters receded Kashmir had another crisis facing its already bruised visage: rebuilding. According to World Bank estimates flood had destroyed 2,61,361 private structures, with 21,000 of them completely washed away.

The loss to the public infrastructure was to the tune of Rs 6500 crores. However the overall loss caused by one of the worst natural calamities to hit Kashmir was estimated at US $ 250.00 million.

However before rebuilding damaged infrastructure the challenge was to clear the premises of muck for construction.

It took Mohammad Shaban, a resident of Jawahar Nagar, ten days to find Bihari labourers for clearing the flood waters from his house.

Instead of starting the work they started bargaining with Shaban. “Immediately after floods labour charges shot up from Rs 300 to 800,” says Shaban. “I couldn’t afford such a change in rates.”

The bargain failed. With no other alternative left, Shaban along with his wife started clearing the muck themselves. “There were many other people like me who had to clear their households themselves,” says Shaban.

The scarcity of labour after floods saw young Kashmiris, especially from rural areas of north Kashmir, flock to Srinagar to earn some quick bucks. “They too demanded same rates as Bihari labourers,” says Shaban.

Mohammad Akbar, a carpenter, from Chrar-i-sharief was jobless post floods for almost a month. “After floods, everyday many people from my area would go to Srinagar to work as labourers. Within no source of livelihood, I too went along,” says Akbar. “We used to earn Rs 800 a day. That was much higher than what I could have earned here.”

Once the cleaning part was done the challenge was to find labour for rebuilding of the damaged houses. However the rebuilding process got hampered because of the continuous downpour in spring season. “I could only start reconstruction of my house in June. But by then the labour charges were about Rs 500 a day. It was more for skilled labourers,” says Mohammad Aslam, whose house in Bemina had collapsed during floods.

Post floods 4287 requests related to fast track construction were received in Srinagar, says Fayaz Ahmad Khan, Joint Commissioner Planning, Srinagar Municipal Corporation (SMC). However, only 2825 cases were cleared for construction, while 103 cases were rejected by the SMC. “We have disposed of around 87 percent of the cases,” says Khan.

But apart from labour issues the scarcity of construction material like cement added to the woes of the flood hit population. “Black-marketers made millions out of people’s miseries,” says a local resident of Rajbagh who struggled to buy cement for constructing his damaged house.

Kashmir has a consumption of 10 lakh tons of cement per year and nearly all of it is produced locally. Industry insiders say that the 12 day long employees strike in Khew, hub of cement producing units, at the peak of construction season added to the crisis. A bag of cement with a retail price of Rs 375 was sold for Rs 450 or even higher in some cases. But Umar Tramboo, Executive Director, Khyber Cements Ltd., says that the increase is not from the manufacturers as thought by the people. “We have not changed retail price of cement since last 3 years now.”

Umar Tramboo claims that Khyber has in fact increased the production by almost 10 percent. “People started construction late this year as there were apprehensions of another flood,” says Tramboo. “But once the threat was over, everybody started construction almost at the same time.”

Tramboo believes that the demand and supply deficit will be in sync by the end of October.

However Waseem Tramboo, Executive Director of TCI-Max, feels that main construction season i.e. month of May saw around 40 percent decline in demand for cement as people had no cash. “People were waiting for insurance money for reconstructing their damaged houses,” says Waseem. “This made otherwise nine month long construction season to shrink to just six months.”

Even government was late in releasing the funds to contractors for developmental works. “It was like everybody started at once,” says Waseem.

Adding to the crisis was ban on sale of Ambuja Cement by CA&PD minister Chowdhary Zulfikar Ali in September 2015. The ban was imposed after a probe found underweight bags and irrational product pricing by the manufacturer. The manufacturer was selling a bag of cement for Rs 465 against its fixed retail price of Rs 346 (Kashmir) and Rs 437 (Jammu).

Ironically, despite such a huge demand for cement in the valley, state managed, Jammu and Kashmir Cements Limited (JKCL) registered a loss or Rs 15 crores in last six months alone. The losses in the last fiscal year were to the tune of Rs 20 crore!

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