High bidding, sand prices set to soar

Ruchika M Khanna

Tribune News Service

Chandigarh, May 19

In Punjab, building a house will get a lot more expensive. For, the Punjab Government today made over Rs 200 crore from the auction of 51 sand and gravel quarries across six districts. With the bidding prices hitting the roof, the prices of sand and gravel are bound to rise manifold.

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The reverse bidding (where the lowest bidder is successful) in 2014-15 had yielded Rs 45 crore. The progressive bidding of the 51 quarries today (51 more will be auctioned on Saturday) is expected to yield Rs 350 crore (including today's bids). With the sites going at such high rates, the bidders would have to sell the extracted minor minerals (sand and gravel) at higher rates to cut even.

The sand mining business in Punjab is cartelised. The auction today saw a rather lukewarm participation from the two main sand mining cartels, both dominated by Congress and SAD politicians. 

One lobby, led by a close relative of a Congress MLA from Majha and the son of a Congress MLA from Malwa, won bids for just four quarries – two in Jalandhar and one each in Hoshiarpur and Gurdaspur. The second lobby, comprising Akali politicians, won bids for one quarry in Jalandhar and the other in Amritsar. The remaining 45 quarries seem to have been taken by new bidders.

The bids were allotted through e-auction, with a retired High Court judge monitoring the process.

In the past six years, the then SAD-BJP government had gone for reverse bidding to keep the prices of sand and gravel under check. In the re-introduced progressive bidding, the cash-strapped Punjab Government would earn over Rs 350 crore by selling 2 crore

tonnes of sand and gravel — which is the annual extractable quantity from the 102 quarries being auctioned.

The 20-odd quarries went for anything between 20-34 times higher than the reserve price. This has made these bids economically unviable. Their is speculation that many bidders could forfeit their deposits. The 51 quarries auctioned today are in Amritsar, Hoshiarpur, Pathankot, Gurdaspur, Ferozepur and Jalandhar. The highest bid received was for Rs 17.22 crore for the Chaharpur quarry in Amritsar, made against a reserve price of Rs 38.26 lakh. 

Officials in the Directorate of Mining, Department of Industries, said they saw no reason for the bidder backing off. Butt in case he forfeits his deposit, there would be a re-action within 15 days. “Though initially the prices may go up, but as supply meets demand, we expect correction in prices of sand and gravel,” said a senior officer.

Punjab auctions 51 quarries

• Already the prices of sand and gravel have shot up since the Cong govt put the brakes on illegal mining
• The price of sand has increased from Rs 14,000 per 800 cubic ft (in March) to Rs 19,000 per 800 cubic ft
• The price of gravel has zoomed from Rs 15,000 per 800 cubic ft to Rs 20,000 per 800 cubic ft