Govt eyes huge revenue, but will end user benefit?

CHANDIGARH: Learning a lesson from last year’s progressive bidding of 79 quarries that saw bidders leaving contracts midway after quoting high rates, the government, in its new mining policy, has assured that bidders deposit a security of 25 per cent of annual concession value in case the bid is up to 150 per cent of the reserve price and 50 per cent if the bid is even higher.

Rajmeet Singh

Tribune News Service

Chandigarh, October 21

Learning a lesson from last year’s progressive bidding of 79 quarries that saw bidders leaving contracts midway after quoting high rates, the government, in its new mining policy, has assured that bidders deposit a security of 25 per cent of annual concession value in case the bid is up to 150 per cent of the reserve price and 50 per cent if the bid is even higher.

To attract big players, the Department of Mines and Geology has divided major rivers into seven clusters to make the mining business lucrative.

Though the total assessed quantity of sand and gravel has been put at 3,119 lakh metric tonnes (MT) and 3406 lakh MT, the government would auction 400 lakh MT of sand and 250 lakh MT of gravel at a reserve price of Rs 344 crore.

Denying that big players would have unfair advantage, Water Resources Minister Sukhbinder Sarkaria has said that a consortium of up to three entities would also be eligible to bid.

Before finalising the Punjab State Sand and Gravel Policy 2018, the Congress government used different channels to assess the requirement of interested players. The bidding would reveal whether outside players would enter the Punjab’s mining business to break the decade-long monopoly of the existing players. It is learnt that in the last few weeks, meetings have been held in Delhi, between major mining players from Jammu and Kashmir and Uttar Pradesh and political leaders having direct or indirect stakes in the states’ mining business.

Dinesh Chadha, an RTI activist, who has been exposing illegal mining in the state, said progressive bidding would result in big players monopolising the mining business.

A mining contractor from Gurdaspur said big players would mine quarries only for profits. “Higher profits can be achieved by controlling the demand and supply. The government would have to ensure that enough mining is done and enough stock reaches the end user. By giving large clusters to the bidders, the latter would mine the quarries at will”, he said.

Questioning the claim of the Water Resources Minister that the prices of sand and gravel would come down to less than Rs 2,000 per 100 cubic feet, Chadha said: “It is easier said and done. The state corporation would have to ensure fair business and a price control mechanism.”

In the policy, the government has stated that both sand and gravel shall not be sold by the concessionaire at the mining site at more than Rs 9 per cubic feet, which includes the cost of loading. The maximum rates linked to distance that can be charged per cubic feet for transportation of sand and gravel will be notified. It would be the responsibility of the concessionaire to dispatch sand and gravel only through those transporters who agree to transport it at the notified or lesser rates.