The New Nation - Internet Edition

A cartel of only six families is manipulating the MS rod market and making windfall profit leaving the entire construction sector into doldrums, according to different sources.

The construction sector has faced a big setback following unusual price hike of MS rod. Implementation of various development projects both in the public and private sectors has almost come to a grinding halt due to sky rocketing prices of MS rod, sources said.

The Government formed a high-powered committee last month to find out the reasons behind the unusual price hike of MS rod.

The committee submitted its report on April 30 incorporating eight recommendations to bring down the price of this particular construction material to a reasonable level.

The committee suggested restructuring of revenue policy, reduction of duty on the import of rods and other measures to break the monopoly of the cartel and make the MS rod business competitive.

The committee came to know that only six families are controlling the ship breaking business and MS rod trade in the country, sources added.

However, the committee has not recommended any action against the unscrupulous businessmen fearing that it may further destabilise the market.

A member of the committee told the New Nation that during the months preceding January this year the ship breakers used to import 8 to10 ships each month weighing 60/70 thousand tonnes. But, between the November 2007 and February 2008 they imported only 10 ships weighing about 40 thousand tonnes, he noted.

The cartel bought more than 10 ships between November and February, but kept those abroad to create an artificial crisis of MS rod and push up its price for making huge profit," he said citing the findings of the committee.

However, after intervention of the government they imported 21 ships in March 2008 weighing 21 lakh tonnes, he added.

He further said price of MS rod cannot be more than Tk 52 thousand per tone if the businessmen follow the ethics. He said price of imported MS rod cannot be more than Tk 62 thousand per tone if even the importers make 10 per cent profit, he mentioned.

One tone of 40-grade rod was selling at Tk 65,000 and 60-grade rod at Tk 75,000 on Thursday.