Dubai: The elimination of import duties on cement and steel will help Dubai's fast-growing construction sector, if not solve the problem totally, industry officials said, hailing yesterday's decree by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
Praising the decree, Dr Ahmad Saif Belhasa, chairman of the UAE Contractors' Association and chairman of Belhasa Group, told Gulf News, "This will help Dubai's construction sector, especially in stabilising the price of building materials. This is a good move.
"However, the rest of the country's construction sector will further benefit if this facility could be extended to the entire country. We'd like the government to reduce the port handling fees as well. This will help importers more."
The government's intervention comes at a time when contractors are trying to cope with a 50 per cent jump in steel price as well as a similar rise in cement prices.
Rising housing demand and increase in economic activity, coupled with an increase in global demand, have prompted the latest increase in cement and steel prices worldwide. An increase in freight and shipping charges have worsened the situation, experts say.
More than 160 major construction projects are expected to be delayed due to the shortage in building materials and skills, industry officials said at a conference on Tuesday.
Rising costs
"Prices of steel and cement - the essential components in the construction sector, have skyrocketed in the last few months," Rizwan Sajan, chairman of Danube Building Materials, said. "This decree will help the market to stabilise."
Shaikh Mohammad yesterday issued a decree to exempt the cement and steel from customs fees until further notice, and to allow all contractors and real estate developers to import these two materials without restrictions. "The verdict aims to control rising prices of construction supplies," a statement said.
The government last intervened in 2004 when cement prices doubled within a few weeks, due to soaring global demand, prompting contractors to directly source cement from new markets.
Belhasa said there is a 12 million-tonne shortage of clinker every year. "Most producers are processing clinkers while there are fewer clinker manufacturers. Prices of clinkers have also gone up to $75 to $80 per tonne, which is too high," he said.
JR Gangaramani, chairman of Al Fara'a Construction Group, said, "The decree comes just in time and will help the prices to stabilise. We have been facing major problems with suppliers who have been increasing prices almost every week. The latest decision will save us from these problems."
