Businessmen specially contractors are in trouble as they feared that higher cost of bricks will increase the cost of construction.
President of Bangladesh Association of Construction Industry (BACI), a platform of the country's contractors, Md Aftabuddin Ahmed told the FE that the hike in brick prices would hit them hard in the current financial year.
He said that most of the tenders had been completed and final implementation of the government's development work was going on. So, the additional cost would have to be borne by the contractors.
When contacted, superintending engineer at the Project Monitoring & Evaluation (PM&E) Unit of LGED Md Anwar Hossain told the FE that the tender process for most of LGED work for the current financial year had been completed earlier.
He said the cost might increase for those who were yet to complete their bidding.
"But, there is no option for evaluation of the cost for the work that has already seen the tender process completed," he said.
He said the LGED set a target to implement 101 projects at a cost of Tk 71.37 billion in its 5,000 kilometres of territory in the current financial year.
Meanwhile, an official at the PWD feared that many contractors might compromise with quality components due to the hike in prices of bricks due to the lack of monitoring.
Tanvirul Hoque Prabal, former president of Real Estate and Housing Association of Bangladesh (REHAB), said the cost of bricks for modern apartments is between 4.5 and 7 per cent of the total expenditure as they use stones instead of bricks for the major portion. "But in the perspective of the whole country, brick is still a major component of buildings. It accounts for 20 per cent of the total construction cost," he said.
He said that construction cost outside Dhaka would surely surge significantly due to the hike in brick prices.
REHAB secretary Md Waheduzzaman said the hike in prices of brick would surely deal a blow to the real estate sector already struggling hard to regain its business.
He said the developers have now more than 15,000 projects in hand and the costs would surge by 1.5 to 2 per cent due to the hike in brick prices.
According to REHAB, the real estate (formal and informal) sector needs nearly 3.15 billion bricks annually.
Coal Factor
The brickfields in Dhaka and Chittagong regions are now using coal imported from Indonesia and South Africa at higher prices. But most of the brickfields in other regions are running with inadequate coal.
They were now paying over Tk 15,500 per tonne of coal against Tk 10,000 last year.
"The government should supply us coal from the Boropukuria mine. It can minimise our production cost," BBMOA president opined.
Harun-ur Rashid, owner of MZH Brick at Saidpur in Nilphamari, told the FE that apart from the increase in coal prices, the hike in transportation costs also caused the spike in brick prices. He said brick prices (number-1 category) increased by Tk 1.0 per piece at the kiln level. But consumers had to pay Tk 2 extra due to the hike in transportation fares amid the ongoing blockade coupled with frequent hartal calls.
To explain, he said the carrying cost of bricks from Saidpur to Rangpur rose to Tk 1,800 per thousand against maximum Tk 1,000 previously. Owner of M/S Rumon Bricks in Bogra Md Abul Kalam Azad said a medium-scale factory manufactures 3.0 million bricks a year in the dry season.
He said the Barapukuria Coal Mining Company Ltd (BCMCL) stopped its supply from March 15 while the imported coal price was hovering above Tk 15,000 per tonne now.
The prices of bricks would surge further in the coming days, if the coal supply does not return to normal, he added.
BCMCL managing director Md Aminuzzaman told the FE that they stopped coal extraction because of transfer of machinery to another 'phase' of coal from the present one. It would take a month to start supplying from the next phase.
However, many of the consumers who got DO (demand order) letters earlier were receiving coal at Tk 13,500 per tonne from the company's stock, he concluded.
Sector insiders predicted that the surge in brick prices ultimately would raise the cost of construction both in the public and private sectors.
According to the BBMOA, the country's demand for bricks is now 8.9 billion per annum. The government-run development programmes under LGED (Local Government Engineering Department), PWD (Public Works Department) and RHD (Roads and Highways Department) and other organisations account for nearly 60 per cent of the demand and the private sector, specially the real estate sector, consumes the rest.
BBMOA former vice president Md Abdur Rauf said that the overall costs for bricks might surge by nearly Tk 18 billion, if the price witnesses a hike by Tk 2 per piece.
tonmoy.wardad@gmail.com
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