Sand lorry strike bleeds real estate industry dry

Realtors suffer a daily loss of over Rs 2 crore as curtailment of sand supply stalls construction in the city; even as the strike enters 24th day, state government and truckers' association fail to reach an amicable solution

The ongoing strike of sand suppliers' association is literally bleeding the real estate industry dry.

The agitation, which started on October 22 with the  demand for renewal of existing permits and issue of new permits for sand extraction and transportation in the state, has subjected realtors to a daily loss of around Rs 2 crore.

Sand lorry owners started demanding Rs 60,000-Rs 75,000 per truckload and some developers are even willing to pay Rs 1 lakh per truckload, but there is no sand in the market

And with neither of the warring parties Federation of Karnataka State Lorry Owners and Agents (FKSLOA) and the state government buzzing, the situation is only going to get worse.

If the developers are worried about cost escalation, the BBMP is complaining that it is losing out on both time and money. Adding to the developers' woes, the strike has completely crippled the sand supply. This has brought construction work to an abrupt halt across the city.

Price pinch
During the initial stage of the agitation, the cost of one truckload of sand escalated to Rs 25,000 from Rs 9,000. But as the strike lingered, sand lorry owners started demanding Rs 60,000-Rs 75,000 per truckload.   Some developers said they are willing to pay Rs 1 lakh per truckload, but there is no sand in the market at all.

Since many developers had set their deadlines and did not want to delay their projects, they had no option but to pay the price.
"Now the supply has completely stopped. There is no way a developer can get sand from anywhere. After the talks between the association and the Transport Minister failed last week, the situation has only worsened," said S Vasudevan, managing director, Ozone Group.

Officials from various other groups also agreed. "Some developers used to procure sand during the night. But the association has now started manhandling drivers claiming that all sections of the association should join the strike. They are not allowing the drivers to supply on the sly either," said an official from DLH.

He added, "The next fear is that they have other aggregates such as stones and the association has already asked its members to stop supply of every construction material.

Some developers who used to depend on everyday or alternate day supply of sand are the worst suffers now. Since sand is the base element for construction, no activities can go on until it is made available. On a daily basis, the industry loses anywhere between Rs 2-3 crore."

Negative impact
The Confederation of Real Estate Developers' Associations of India (CREDAI) too has acknowledged the huge losses the industry is facing. 

"If the strike continues further, it will have a negative impact on the ongoing construction work. For, it will result in delay of projects and inflate labour and other construction costs," said Sushil Mantri, President, CREDAI Karnataka.

He added that majority of the workers are either going back to their home states or shifting to neighbouring states for work.

The industry, already suffering from labour shortage, will suffer further and projects will be delayed. This will create huge irreparable damage.

"For the sake of the common man, the government and the parties concerned should come to the table and arrive at an amicable solution," he said.

Realtors further asserted that re-mobilising of resources would take a lot of time. Developers have to complete their projects on time and hence will have to hire more labourers to meet the deadlines. Ultimately, the burden of increased expenditure will be passed on the end user general public.

Civic projects stalled
Civic projects too were stalled across the city. BBMP engineers claimed that work was moving at a slow pace in different parts of the city.

"The work is slow in a few places and in many areas it has been stalled completely. We give out complete contracts for entire projects and now the cost of delay would escalate too," said S Somashekhar,
chief engineer, Road Infrastructure, BBMP.

Bleeding bodies
Daily loss suffered due to the sand lorry strike:
Government agencies  around Rs 10 lakh
Private developers around Rs 2 crore
Other projects a total of Rs 5 lakh

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