Punjab sand crisis: 107 mines auctioned in four rounds, only 23 are operational

Till December 2017, 98 mines were in operation. Of these, 56 mines were from the lot of 92 mines successfully auctioned in three phases last year under the progressive bidding method (highest bidder wins), which was introduced by the Congress government; 42 mines had been auctioned earlier under the reverse bidding method (lowest bidder wins) when the previous SAD-BJP government was still in office.

Out of 92 successful bidders, only 56 paid the second installment of their bid due on January 1. Out of these 92, about 10 contractors applied to the department to get a refund of the money deposited on the plea that there was not enough material available. The government has sought legal advice on the issue. These include Sundran, Mirpur, Kakrali and Pandwala in Mohali, where the contractors have sought withdrawal citing non-availability of mining material on the site. The rest defaulted on the payment, resulting in the government stopping mining operations at these mines.

Out of these 56, only 23 paid the third installment due on April 1. “We mined whatever sand was available. After that we did not pay the second installment. Why should we when there is no sand in the mine,” said a contractor. As per rules, successful bidders must deposit 60 per cent of the bid amount immediately on getting the contract. The amount includes security deposit, first installment, earnest money and environment clearance fee. The rest is to be paid in two quarterly intervals.

Forty two mines allotted during the SAD-BJP government have also been scrapped. When the Amarinder Singh government scrapped the previous SAD-BJP government’s reverse bidding method, it also cancelled the contracts of those who had won five-year rights for mines auctioned in 2016, months before the Assembly elections. The contractors challenged the cancellation, and the matter went up to the Supreme Court. The Punjab government argued in the court that reverse bidding capped the sale price at the pit head, but the price was padded up by the time it reached the market, which is why it had scrapped the system. On the other hand, under progressive bidding, each mine is auctioned for its true and real value, the government had stated, and it could not allow mines allotted under the previous policy to function. The court upheld the government’s decision. The government had committed to pay these contractors Rs 11 crore in compensation. But the closure has aggravated the shortage.

Out of the 23 functional mines, two are in Amritsar, including Balarwal and Rurewal, two in Fazilka, including Amir Khas and Mohar Singh Wala, six in Ferozepur including Bandala, Gatta Badshah, Chak Khanna, Gillan Wala, Shiha Pahdi, Nizamwala, six in Jalandhar including Pipli, Kaimwala, Khorulapur, Burewal, Salkiana, four in Moga including Jaspur Gheliwala Block -I and Block -II, Chak Bhora, Bassian; Adalatgarh in Pathankot, Lalewal, Mandhala and Bairsal in Nawanshahar.

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To meet up with the demand, the government was planning to auction another lot of 145 mines of sand (2.7 crore tonnes) and 18 mines of gravel (0.2 crore tonnes) on March 15. But with reports of rampant illegal mining, Chief Minister Amarinder Singh set up a Cabinet sub-committee led by Local Bodies Minister Navjot Singh Sidhu to study the sand mining scene in Punjab and come up with a policy.

The draft policy got hit by differences between the members of the sub-committee. Sidhu submitted the draft to the Chief Minister which did not have the signatures of the other ministers. The CM has now asked the other ministers, including the Minister of Mines, Sukhbinder Singh Sarkaria, Rural Development and Panchayats Minister Tripat Rajinder Singh Bajwa and Finance Minister Manpreet Singh Badal, for their inputs on the issue. Till then the auction is on hold.

The government had, in its first round of auctions in May 2017, invited bids for 102 mines out of which 89 received high bids, but 39 bidders, who bid unrealistic amounts, never showed up to deposit the security amount.
Of the remaining 50, two mines, Mehadipur and Saidpur Khurd in Nawanshahar, were cancelled by the government following Justice J S Narang probe into allotment of mines to ex-employees of former Irrigation Minister Rana Gurjit Singh.

Read | Punjab sand crisis: Construction industry takes a hit, suppliers from Haryana, HP hit gold

Another mine in Behloor Khurd, also linked to the minister’s ex-employees, is not operational. The government has not given its consent for operations.

In the second round of auctions in July, 43 mines, including those not auctioned in May 2017, were auctioned and only 29 bids were received. In third round of auctions, out of 39 mines only 12 bidders showed interest. Similar was the case in fourth round of the exercise in February when only 16 out of 51 mines got bids.
Of a total of 107 allotted in the four different rounds, only 23 are carrying out mining operations. The total demand for gravel in Punjab is pegged at 2.4 crore tonnes, while for sand, the demand is 1.6 crore tonnes, totalling to 4 crore tonnes.

Minister of Mines and Water Resources, Sukhbinder Singh Sarkaria said he was aware that less than 30 mines were in operation. He said they were planning to launch a massive desilting operation in the rivers of the state in order to pump more sand into the market. “This would itself take care of the demand and supply balance and hence check the prices. Also, the monsoon season is coming up, and there is less pressure on sand as construction industry would slow down. As soon as the monsoon gets over, we would have auctioned more mines by then. The crisis would be over,” he said.