Chandigarh: Encouraged by the successful e-auction of 89 mines, the Punjab government has decided to release another 70 lakh tonnes of mining capacity soon to meet the state-wide demand for sand and bring the commodity price under control.
With the generation of a total capacity of 3 crore tonnes, the government is looking at filling the demand-supply gap in the state, thus effectively decartelizing the mining business and stabilizing the price of sand, an official spokesperson said here on Sunday, providing the rationale for the Captain Amarinder Singh government’s strategic decision to release more sand into the market through progressive bidding.
Categorically allaying fears of a price rise, as projected in a section of the media, the spokesperson said the government policy on mining rests on the twin pillars of reasonable price for the people and reasonable revenue generation for the state coffers. The revenue from mining was earlier being diverted into the pockets of the mafia, and the Congress government was committed to effectively eliminate illegal mining and ensure level playing field for all.
The e-auctions, said the spokesperson, had restored the faith of the common businessman in the system and had encouraged many new players to enter the field, as reflected in the wide participation in the bidding, leading to the destruction of the cartel formed by a few players and a record-breaking revenue generation of Rs. 1026 crores through the release of 1.3 crore tonnes of sand.
With 70 lakh tonnes of additional capacity set to be released soon, the total quantity of sand in the market will go up to 3 crore tonnes (including the 1 lakh tonnes already available). This would be more than sufficient to meet the current estimated demand of 2 crore tonnes, the spokesperson added, pointing out that with such a huge amount of material available for sale, the question of overcharging or hoarding could not arise.
The spokesperson further said the conditions of mine allotment under the present government’s policy have built-in checks against hoarding and speculation by the contractors, who are required to deposit security and advance payment by May 23. In case of failure, the earnest money deposited will be forfeited and the mine will be re-auctioned immediately, with the said contractor being blacklisted for the future.
Further, the successful bidder has to pay a quarterly instalment of total bid amount irrespective of actual mining. In case of failure, the security will be seized and the mine will be put on auction again.
The Department of Mining, according to the spokesperson, is actively working on the identification of new sites and will keep adding capacity to keep a check on supply side. Further, the existence of multiple players will prove to be a strong deterrent against illegal mining as the contractors will themselves keep a strict watch on others in order to protect their own interest.
The Department is also in the process of putting in place a strong mechanism to check illegal mining, which includes physical and technological checks. This will further support genuine players.
All efforts of the government are directed towards streamlining of the mining sector and diverting the abnormal contractor profits to the government exchequer, for use in public welfare programmes, the spokesperson added.