Sharjah offers intervention with authorities on cement

To study the cement price hike problem and recommend measures

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By  Eudore Chand Published  June 12, 2004

Sharjah Chamber of Commerce & Industry has offered to draft a list of recommendations for competent UAE authorities regarding the building material price problem being faced by the contracting sector. In meetings with representatives from the contracting industry, chamber authorities have agreed to study the problem in depth and to interact with concerned federal authorities to find ways to solve the crisis. Reacting to calls from contractors that the Ministry of Economy & Commerce should intervene directly and immediately to find a solution to the price crisis, Mohammed Sultan bin Huwaiden, first vice-chairman of Sharjah Chamber, emphasised the keenness of Sharjah Government in helping overcome all obstacles facing the construction and contracting sectors. He said the emirate’s government was aware of the problems caused by the increase in prices of building materials, particularly that of cement and promised that the Sharjah Chamber would study the issue, find possible solutions and make relevant recommendations to competent authorities. The meeting was organised by Sharjah Chamber at the World Business Club to discuss the price hike, factors behind it and its impact on the national economy. The open discussion included representatives from cement producers and traders. Cement producers were criticised for acting in a concerted manner that very much resembled a monopoly situation. They were alleged to have taken unfair advantage of the high demand to push up prices beyond reasonable levels. Contractors called on the government to intervene and prevent such a monopolistic situation. Representatives of cement producers refuted the charges and pointed out that pure market force of demand and supply dictated the price phenomenon in the UAE. Prices are dictated by demand and also by the high cost and prices of raw materials with which cement is made. In response the contracting community urged the government and the cement producers to fix a price band to ensure that fluctuations are contained within a set upper limit. They also asked the government to ensure a smooth flow of supplies to the various projects that are presently being carried out in different parts of the Emirates. Marketmen say such demands are unlikely to meet with much response as the UAE is committed to laissez faire policy of free trade. Intervention to fix the price mechanism has not been done and is not likely. It is also not known what will happen to price controls when cement prices eventually go down as is being suggested will happen within a couple of months when substantial imports start to flow in. Sharjah attaches importance to the sector as is evident from the attendance of Ahmed Mohammed Al Shamsi, chamber second vice-chairman, Mohammed Ahmed Ameen, assistant director general for economic affairs; Rashid Al Ghazal, assistant director general of Sharjah Municipality, and representatives of Economic Development Department, Public Works Department and the UAE Contractors Association.

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