CEMENT PRICE HIKE INCREASES CONSTRUCTION COSTS

MBABANE – The recent hike on the unregulated price of cement has resulted to an increase in the cost of construction services.

Contractors in the country mostly use Ordinary Portland Cement (OPC) type of cement which is widely available in the country. OPC is a type of cement that is manufactured and used worldwide. It is widely used for all purposes including concrete; which is when the OPC cement is mixed with aggregates and water, concrete is widely used in the construction of buildings. The cost of purchasing cement has increased two times in the past two quarters, which has resulted in the cost of construction services to escalating exponentially. This was mentioned by the director of one of the construction companies based in the country.

Charge

The director said the hike in cement price has relatively forced them to increase the charge of their services. He said this has resulted to a decrease in the number of tenders and other services related to construction as client feared being over charged. “We have lost clients and tenders because they sometimes feel what we charge is high than what they expect which affects us because the cost of purchasing the items needed has increased,” he said. The director also mentioned that this have resulted to most construction companies hiring cheap labour personnel as opposed to professionals who tend to charge higher. “We now have to be strategic when hiring as it now cost more to provide the service than the profit margins which are still stable,” he said.  

Increased

The director also mentioned that cement is not the only construction product which its prices had increased, he said almost all the product prices have increased excluding that of river sand. He said it is now a challenge in their sector because the price they charge for their services had not changed for the past three years. “When we give our clients quotations, they are amended most often because they think that we over charge them, yet we aligned it with the cost of production,” he said. The Construction Industry Council (CIC) said they do not regulate the price of products like cement as their duty is to promote and develop the construction industry in Eswatini and also give priority to Eswatini firms and companies. They said they regulate activities in the construction industry through the appropriate institutions, Boards and other authorities.

Competitive

“We provide data and the size and distribution of contractors operating within the industry to promote research, development and the use of competitive local materials and appropriate construction material,” mentions CIC. Director of Micro Small and Medium Enterprises (MSME) Mluleki Dlamini aforementioned to this publication that the construction industry business segment occupies only three per cent in the overall business segment of Eswatini. He said this is because the costs of services had increase thus decreasing the number of people in need of the services. Dlamini was speaking during the capacity building on entrepreneurship development for MSME in the country at Sibane Hotel.

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