Print Edition - 2015-05-22 | MONEY
Zinc sheet price may be fixed at pre-quake level
May 21, 2015-
The government has been mulling fixing the maximum retail price (MRP) of zinc sheets based on the price on April 24, a day before the Great Earthquake. The devastating tremor levelled thousands of homes and demand for the corrugated roofing sheets has soared, leading to shortages and a black market.
Finance Secretary Suman Sharma said that the MRP would be determined based on the value added tax (VAT) bill issued on that date.
The government had initially attempted to procure zinc sheets from the manufacturers at the factory price by offering them subsidies and other facilities. However, the producers rejected the government’s offer saying that they would lose money on the deal, said officials.
The government has decided to give Rs15,000 each to the families whose houses were destroyed to buy zinc sheets. Earlier, the National Planning Commission had proposed to provide two bundles of zinc sheets each to the affected families, but the Cabinet ruled in favour of giving cash.
Commerce Secretary Naindra Prasad Upadhyay said the government’s intervention in the form of price controls could help check black marketing. The Commerce Ministry is working to set the MRP in coordination with the Finance and Industry ministries.
Meanwhile, the government has estimated that more than 700,000 houses were partially or fully damaged by the tremor, rendering hundreds of thousands of families homeless. Around 1.2 million bundles of zinc sheets are projected to be needed over the next two years to rehabilitate the displaced families
Apart from the government, many social organizations have been buying zinc sheets to distribute to the earthquake victims. However, a rise in black marketing due to a surge in demand has been impeding the government’s rehabilitation plan.
Industry Secretary Jay Mukunda Khanal said the government has planned to make the MRP public by Friday.
Before the earthquake, the galvanised iron sheets were reported to cost Rs5,000 for a 50-kg bundle. However, the manufacturers are now claiming that they cannot go below Rs5,700 per bundle.
According to Diwakar Golchha, vice-chairman of the Golchha Organisation, they would have to set the price at Rs5,550 plus VAT for a bundle of 72 sheets to break even.
Four Nepali companies-Arati Steels of Biratnagar, Hulas Metal of Simara and Rajesh Metal and Bhagawati Metal of Birgunj-manufacture the product. These factories have a combined production capacity of 13,000 bundles daily. They were reportedly exporting half of their output to India.
The government has requested these companies to stop exporting their products to India for now to regulate supply levels in the domestic market. The government has allocated Rs4 billion to purchase zinc sheets for rehabilitation purposes. It has also been considering importing zinc sheets from India and China to meet the shortfall.
Published: 22-05-2015 08:16