Tamilnadu to nationalise cement plants if cos don’t cut prices
The ruling DMK government and the cement industry are heading for a show down on the spiralling cement price issue.
By TNN |
CHENNAI: The ruling DMK government and the cement industry are heading for a show down on the spiralling cement price issue. In addition to importing cement through MMTC, the state government on Wednesday declared that it will takeover cement plants if the companies fail to arrest the rising price.
The government announced that it “will have no option but to nationalise the cement factories in the state in public interest if the producers fail to reduce price”.
However, the industry ridiculed the government decision as a “political stunt” referring to the government’s bid to calm down its troubling poll ally, PMK, which is harping on the spiralling cost of cement and demanding distribution at controlled price through PDS like food articles. At a high-level meeting chaired by chief minister M Karunanidhi on Wednesday, the government decided to go ahead with import of cement through MMTC. The government will issue immediate orders for importing one lakh tonnes of cement through the state-owned Tancem, which will have a tie up with MMTC.
Depending on the need, Tancem will make arrangements for import. It is learnt that the corporation has plans to import up to 18 lakh tonnes over 12 months to control the price. An official release said the imported cement will be distributed directly to consumers through the 200 outlets of Tamil Nadu civil supplies corporation at the actual cost without any profit.
Last week, Tancem issued a public notice stating in tune with the policy decision of the state government to control cement price, the corporation has obtained an exclusive dispensation license from the Centre for import. It said the rate of import cement per bag of OPC 43 grade up to Chennai and Tuticorin ports is about Rs 160. The ruling price of cement per bag ( 50 kg) is Rs 245 to Rs 255.
The issue is hogging the state’s political limelight for sometime now. PMK founder Dr Ramdoss is often raising the issue and he has blamed the cartel formed by the producers. He is also demanding the government to rein in the situation by importing cement and distributing it through PDS like food articles.
Industry circles content the price situation is an all India phenomenon and it is a pure play of market forces ( demand vs supply). All the factories are working at fully capacity and their expansion programme is in full swing to meet the demand. Despite this, they expect shortage to arise in the next of couple of months.
They have brushed aside the scope for Government takeover of the private sector plants. “ How can a State Government takeover a business coming under Centre’s purview? It is impractical and will not stand before any court of law. Can they takeover a car factory to control price? It only amounts to sending a wrong signal to the investing community at a time when Tamil Nadu is attracting a number of projects”, an industry player said.
The government announced that it “will have no option but to nationalise the cement factories in the state in public interest if the producers fail to reduce price”.
However, the industry ridiculed the government decision as a “political stunt” referring to the government’s bid to calm down its troubling poll ally, PMK, which is harping on the spiralling cost of cement and demanding distribution at controlled price through PDS like food articles. At a high-level meeting chaired by chief minister M Karunanidhi on Wednesday, the government decided to go ahead with import of cement through MMTC. The government will issue immediate orders for importing one lakh tonnes of cement through the state-owned Tancem, which will have a tie up with MMTC.
Depending on the need, Tancem will make arrangements for import. It is learnt that the corporation has plans to import up to 18 lakh tonnes over 12 months to control the price. An official release said the imported cement will be distributed directly to consumers through the 200 outlets of Tamil Nadu civil supplies corporation at the actual cost without any profit.
Last week, Tancem issued a public notice stating in tune with the policy decision of the state government to control cement price, the corporation has obtained an exclusive dispensation license from the Centre for import. It said the rate of import cement per bag of OPC 43 grade up to Chennai and Tuticorin ports is about Rs 160. The ruling price of cement per bag ( 50 kg) is Rs 245 to Rs 255.
The issue is hogging the state’s political limelight for sometime now. PMK founder Dr Ramdoss is often raising the issue and he has blamed the cartel formed by the producers. He is also demanding the government to rein in the situation by importing cement and distributing it through PDS like food articles.
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Industry circles content the price situation is an all India phenomenon and it is a pure play of market forces ( demand vs supply). All the factories are working at fully capacity and their expansion programme is in full swing to meet the demand. Despite this, they expect shortage to arise in the next of couple of months.
They have brushed aside the scope for Government takeover of the private sector plants. “ How can a State Government takeover a business coming under Centre’s purview? It is impractical and will not stand before any court of law. Can they takeover a car factory to control price? It only amounts to sending a wrong signal to the investing community at a time when Tamil Nadu is attracting a number of projects”, an industry player said.
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