PRICE DOESN’T GO DOWN UNTIL THEY SELL

A1+
[11:47 am] 17 February, 2009

Prices for some construction materials have gone down, while for
some prices have gone up. Vice-director of the Center for pricing,
analysis and information of the Ministry of Urbanization Levon
Tumanyan says that the rise and fall of prices is due to the global
economic recession.

According to him, the rise and fall of prices for construction
materials in Armenia don’t always fall in line with prices in the
global market. He says that the prices don’t go down until the product
has not been imported and consumed in Armenia at the price that it
was imported.

Based on the information of the center from September 2008 until now,
the changes in prices for construction material have affected copper
fasteners, which are high in demand in Armenia. For example, within
six months the price for one ton of 8 mm copper fasteners went down
from 437,500 dram to 304,330 drams.

As for asphalt concrete, according to Tumanyan, an Armenian
organization has improted 300 tons of bitumen and must use it all up.

"Prices for asphalt concrete have not gone down in Armenia; rather,
they have gone up from 25 drams to 26 drams. In fact, you need 70-80
kilograms of bitumen to get a ton of asphalt concrete," told "A1+"
the vice-director of the Center for pricing, analysis and information.

Wood material prices have also gone up from 87.50 drams for one cubic
meter to 95.83 drams for one cubie meter when it should ahev been
the opposite taking into account the 30% fall in prices for fuel.

A liter of benzene has gone down from 342 drams to 225 drams, while a
liter of diesel fuel has reduced from 350 drams to 217 drams. "Unlike
other countries, prices go down when demand goes up. Armenia lacks
healthy competition. If the price for a product goes down, the demand
goes down as well. But they want to sell what they have in order to
gain profit," says Mr. Tumanyan.

Has the economic crisis had an impact on the implementation of state
projects? In response head of the construction department of the
ministry Gor Kamalyan said that the crisis and inflation have not
had an impact on the projects because all construction is financed
by the state. The state has already conceded funds for construction
and only time will show. But the inflation of construction materials
has not affected contracting organizations.

For example, head of the marketing and consuming department of the
"Griar" CJSC Sergey Azaryan says that the rise and fall of construction
material prices have had a positive impact on construction because
the prices for materials have mainly gone down. But according to him,
the issue is that there is no demand.