A high level government-formed committee that probed excessive price increase of mild steel (MS) rod has suggested breaking the monopoly in the market for the major construction material to bring down its spiralling prices to a reasonable level.
The committee headed by Housing and Public Works Secretary ASM Rashidul Hye submitted its report containing eight-point recommendation to Commerce Adviser Hossain Zillur Rahman yesterday.
The probe report also asked for amendments to import and taxation policy to increase import opportunity in the sector.
The government will review the recommendations and start implementing those next week.
“Monopoly leads to manipulation of market one-sidedly. We need to break it immediately for a sound competition in the market for MS rod,” the adviser told reporters briefing them about the probe report.
Earlier, the commerce ministry at a meeting on April 17 found no logical reason for rise of MS rod price by 55 per cent in the last four months, which forced the construction sector to come to a standstill.
Sources pointed out that a cartel of about 20/22 businessmen control the market of MS rod.
The April 17 meeting formed the probe body to find out the ‘unexplained reasons’ for abnormal price rise of the major construction material, which adversely affected the Annual Development Programme and the country’s economy. It was asked to submit its report with recommendations by April 30.
The committee members visited several ship-breaking yards in Chittagong and talked with scrap ship traders, re-rolling millers and rod traders before finalising its report.
“Since the business mainly depends on import, the probe committee has asked for immediate steps to ensure competition to break any monopoly that leads to control on the whole market,” Hossain Zillur said yesterday.
Besides, a taxation policy-related recommendation suggested steps for keeping the price rational.
The adviser said, “We won’t accept any irrational explanations or demands by any party in this regard. But we’re dealing the matter with a professional approach. We will .not impose price forcibly or target any individuals.” He hoped the steps will have a positive impact on the market and price of MS rod will come down and remain stable.
Asked about the steps, Zillur said he would disclose those to the media next week.
The April 17 meeting decided to commercially open up the business of scrap materials and the ship-breaking industry to create a competitive market.
The adviser that day said steps would be taken to import the “60 grade finished rods” for making the market competitive.
Some businessmen said rod prices will not come down if supply of raw materials cannot be ensured at a reasonable rate. They stressed breaking the cartel in ship-breaking industry to keep rod prices at a reasonable level.
The government recently fixed the highest price of MS rod at Tk 62,000 a tonne as the price rose to Tk 75,000 in early April from Tk 50,000 in January. Most shops selling MS rod remained closed in the wake of drives by law enforcers to implement the government decision. And this further deepened the crisis.
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