Punjab Government to bring new mining policy

The Punjab government is likely to bring in its new mining policy, which aims to bring down the prices of sand and gravel for the common man by over 50 per cent.

Facts :

• The state government proposes to fix low reserve price for each quarry and fix the price of sand (at the pit head) not exceeding Rs 800-Rs 900 per 100 cubic feet.
• Presently, price of sand is between Rs 3,000 and Rs 3,800 per 100 cubic ft. Gravel is being sold for Rs 2,100-4,000 .
• By making such high bids, majority of bidders were also unable to pay their quarterly instalments to the government and they left the contracts mid way.
• Of the 79 odd quarries that were auctioned since May 2017, only 15 quarries are operational.
• Though the state government is looking to get Rs 400 crore as revenue from the auction of sand and gravel quarries, it is hopeful that the new policy will bring down the rate of sand and gravel to less than Rs 2,000 per 100 cubic feet.
• The bidders will thus have to offer bids at lower rates, considering the price at which he can sell sand will be pre-decided.
• In order to make sand mining attractive for the bidder, the latter will be offered groups of mines.
• The contractors will be asked to get the Environmental Clearance (EC) of the quarrying site themselves.
• The annual requirement of sand and gravel in the state is 4.50 crore metric tonnes.
• The proposal sent by Local Bodies Minister Navjot Singh Sidhu for setting up a mining development corporation on the lines of a similar corporation in Telangana has been shelved for the time being.

Analysis :

• As against the earlier policy of auctioning single mines, the government now proposes to auction a group of mines, which could be all quarries in either a subdivision, district or revenue division.
• Over the past one year, ever since the Congress government changed the system of bidding for sand and gravel mines from reverse bidding to progressive bidding, prices of sand and gravel shot up by almost 100 per cent.
• Those who bagged the contracts for operating these mines in 2017, got these at very high rates.
• Thus the rates at which they sold the mined minor minerals also shot up.
• After the new policy is approved by the Cabinet and once the quarries are auctioned, there will be more supply than the demand. This will automatically bring down the prices of sand and gravel.

By: Harman Sandhu