Etendering process flawed, sand, gravel prices to go up
Govt set to lose revenue due to reverse bidding of 59 mines; state is likely to earn nearly ₹25 crore, less than ₹37 crore generated last fiscal
The eauction process is flawed. It seems the bureaucracy has misled the ministers and even CM over the mining auction process. The gravel price was ₹500 at pit head which will now go up to ₹700₹800. I won’t allow this loot, which also took place during the previous AkaliBJP regime. JOGINDER PAL, Cong MLA from Bhoa (Pathankot)
PATIALA: The Punjab government’s move to auction 59 sand and gravel mines under the Punjab Miner Mineral Rules, 2013, will neither benefit the state government nor the consumers as the prices are likely to shoot up due to the flawed tendering process.
According to sources, the state is likely to earn between ₹20 crore and ₹25 core from the auction this fiscal, which is less than the revenue generated (₹37 core) during the Akali Dal-BJP government’s regime last fiscal.
The e-tendering process conceals more than it reveals. Though department has termed it an auction, it seems like a “draw of lots”, which is neither favouring the government nor consumers, but benefiting the mining mafia, say sources.
Tightening the noose around the mining mafia was one of the pre-poll promises of the Congress government. During the election campaign, Captain Amarinder Singh had termed mining a ₹1,000-crore loot, with the state getting only between ₹37 crore and ₹40 crore revenue per year.
The 59 mines to be put on auction on April 18 have a total area of 271 hectares and the government has allowed digging out 26.85 lakh tonnes of sand and gravel. The auction is likely to fetch ₹40 crore, but the government will get only around ₹20 core to ₹25 crore while the rest will go in the pockets of mining contractors and land owners as compensation.
The department has fixed reverse auction (where several sellers offer their items for bidding and compete for the price which a buyer will accept) this year against the previous government’s policy of incremental auction (the minimum amount an auction bid must be raised
each time the current highest bid is surpassed. The increment is determined by the value of the most recent bid). This means fixing the selling price at the pit head.
For this, the department has adopted a formula in which government royalty will be ₹30 (per tonne), district mineral foundation fund ₹10, compensation to land owner ₹50, labour charges ₹25, environmental clearance expenses, weigh bridge expenses between ₹30 and ₹55, and profit ₹10 per tonne, to calculate a selling price of the raw material. Out of this, the government will only get royalty, district mineral foundation fund, environmental clearance expenses (from 75 paisa to ₹5.07 maximum per
tonne), and environmental fund, which is 10% of the royalty. On the other hand, mining contractors will get labour charges, weight bridge charges, profit, and even compensation if they strike a deal with land owners.
The department has put another rider that one can’t bid less than the selling price fixed by government. “In the reverse bidding, there is no provision to bid below the selling price fixed by department. Those who will bid the lowest price (equal to fixed price), will be treated as L1 and there will be a draw of lot of all L1 bidders,” said a mining department official.
“The Congress government will not be able to generate more revenue from the auction than
the previous SAD-BJP government. Then why was the Congress alleging scam in the past? It’s now for the Congress leadership to clarify that either there was no scam in past or admit that they are also committing the same fraud,” said a bureaucrat, requesting anonymity.
State mining department director Amit Dhaka also admitted that sand and gravel prices will soar for the time being. “The prices will come down once the department auctions another 50 mines in the next two months. The policy is aimed at curbing prices at the pit head or the mining area. That’s why the prices have been fixed. If we go for incremental bidding, the prices will rise further.