100 percent increase in brick prices in two months

Politically well-connected kiln owners have raised bricks' prices by 100 percent in two months without any significant change in their cost of production and construction industry, sources told Business Recorder here on Thursday. They said Kiln owners were selling "A" class bricks at Rs 3, 500 per thousand two months ago.
In June they raised the bricks' price by Rs 1, 800 per thousand and now they are selling bricks up to Rs 7, 000 per thousand against their production cost of Rs 1, 500 per thousand. It may be added that kiln owners had been observing strike intermittently in different districts of Punjab since last month against imposition of 16 percent General Sales Tax on bricks claiming it would raise the rates of bricks. There are as many as 15,000 kilns across Pakistan. One kiln bakes about 6 million bricks in a year. Six million people are said to be attached with the industry.
Construction Industry experts said that this 100 percent increase in bricks' prices will directly affect the middle and lower class because they use 90 percent of the production for construction of their houses, etc, whereas plazas and business centers consume only 5 per cent of this material.
They said consequently construction cost of residential houses will double and for the middle and lower class and shelter-less people construction of a house with bricks will become a distant dream. Ten million of people including bhattta labour, mesons and their labourers will be hit directly while business of iron, cement, sand, earth and coal is related to brick industry, they added.
Meanwhile leaders of Pakistan Bhatta Mazdoor Union from across the Punjab province met here under the chair of Mahmood Ahmad Butt and discussed the situation arising out of kiln owners strike resulting into increase in bricks' prices and laying off hundreds of thousands kiln workers.
Talking to Business Recorder they said that production cost for kiln owners comes to Rs 1,500 per 1,000 bricks. The influential and politically strong owners are earning huge profits but still are not paying the labour rate fixed by the government, ie, Rs 518 per 1,000 bricks to the kiln workers.
They said that before imposition of 16 percent GST in budget FY 2011-12, the kiln owners had already increased the bricks rate by Rs 1, 800 per 1,000. Now they have further increased rates of the bricks by Rs 1, 200 per 1,000 though their cost of productions remains the same. The kiln workers leaders claimed that the kiln owners do not want to register their kilns and pay GST for otherwise they would have to register their workers and give them their legal rights such as social security cards.