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Punjab Cabinet approves new sand and gravel policy

PTI:  October 17, 2018

Chandigarh: To bring further transparency in sand mining sector, the Punjab Cabinet Wednesday approved major policy changes to enable the government to grant contracts by auction of mining blocks in strategically established clusters through progressive bidding instead of the earlier process of auction by individual mines.

The decision came during the Cabinet meeting held Wednesday under the chairmanship of Chief Minister Amarinder Singh.

It was decided that the new policy would come into force two months after the Cabinet approval to the Punjab State Sand and Gravel Policy, 2018 and amendment to the Punjab Minor Mineral Rules, 2013, the statement said.

The move would help substantially increase the royalty receipt of the state exchequer, provide adequate supply at fair price to the consumer and curb illegal mining, an official statement said here. 

It has also been decided that the department of mining would launch an online Punjab Sand portal for sale of sand to all the consumers. 

All transactions/payments will be captured through an online real-time monitoring system. 

The sale of sand would be controlled by electronic documentation linked to the central documentation, with modern facility, and the daily progress report would be uploaded on the portal. 

As per the new policy, the mining rights of concession quantity of sand and gravel in mining blocks identified by a process would be put to bidding through transparent e-auction process, the statement said. 

Only registered companies, partnerships, societies including cooperative societies, sole proprietorship, individuals and consortia of up to three such entities would be eligible to bid, subject to fulfilment of certain conditions. 

The average annual turnover of the bidder during the last three fiscal ending March 31 should not be less than 50 per cent of the reserve price of the mining block he bids for. 

Notably, during 2017-18, four progressive bid e-auctions of minor mineral mines were held. Due to speculative bidding in these auctions, it resulted in a significant number of mines being auctioned at increased prices.

However, many of the contractors failed to operationalise these mines, which led to dearth of supply of sand and gravel, causing the market price of these commodities to trade at higher levels, the statement said.

In the case of consortium, the combined technical and financial capacity of all the members would be considered for the eligibility, the statement said. 

The new policy provides for the quantity of sand and gravel, to be called 'annual concession quantity', that the concessionaire shall be allowed to mine per annum from a block as detailed criteria given for seven blocks of the state, the statement said. 

The estimated available quantity in each block is, however, indicative and it would be the responsibility of the bidder to make his own assessment of it before bidding. 

The concessionaire would be responsible to identify the mines in the block allotted to him, obtain consent of the land owners, arrange for all the infrastructural requirements like a right of way and obtain all clearances before the starting of mining operations. 

Both sand and gravel would not be sold by the concessionaire at the mining site at more than Rs 9 per cubic feet, which includes cost of loading on the vehicle.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.