Non-utilisation of ADP
I would like our govt. to carefully understand the following problems they are shortly going to face:
Prices of steel materials are static for the past 2 months or so and will remain so till the rainy season is on. The main reason for prices of steel being static is that the entire economy is at a standstill, thanks to the most conservative policy being adopted by our policy planners. They do not want growth for fear of inflation! Anyway that is the choice every govt. has to make.
My idea of writing this letter is that the govt. must immediately think rationally and start buying steel rods from quality steel manufacturers for their projects. Once market picks up, the rods prices will raise and the govt. will come under the vicious circle of contractors backing out and thus non utilisation of ADP. They need not pay for the same.
They simply have to calculate their rods required in their projects for, say, the next 3 months and buy rods under open public tender with stipulations that their contractors duly authorised by the relevant govt. department will pay and buy the rods from these mills within a stipulated time frame every month for which the govt. will have to give guarantees. The govt. can at best advance the contractors 80% of rods prices against receipt of rods at construction site. In such a depressed market the govt. will get rods at a competitive price and this way no ADP projects will suffer in the next three months.
After three months they can keep repeating such tenders. Today even imported rods at lowest duty ever will cost Tk. 85,000 per ton as against rods available in the market at Tk. 62,000 per ton of commercial grades, majority of which is consumed by the govt. projects.
If the above suggestion is implemented the ADP projects will not come to a standstill as they have during the past 6 months and thus the day labourers will be getting their labour wages regularly and industries set up to cater to such demands will keep running at full capacity, which they are not at the moment. Remember, the govt. is the largest spender of public money and the largest buyer of steel in the country.
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