Punjab Cabinet Approves new Sand and Gravel Policy

The Punjab Cabinet today approved the much-awaited Punjab State Sand and Gravel Policy, 2018.

Facts :

• The policy enables the entry of big players in the business of sand mining by dividing the state in seven clusters each comprising of two to three districts.
• 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 government approved 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.
• Sticking to the existing policy of granting contracts by auctioning mining blocks through progressive bidding instead of the earlier process of auction by individual mines, the government claimed that it would not only boost the state revenue to nearly Rs 400 crore annually, but also result in self-regulated price control mechanism and check rampant practice of illegal mining.
• Both sand and gravel shall not be sold by the concessionaire at the mining site at more than Rs 9 per cubic ft, which includes cost of loading. The maximum rates linked to distance that can be charged per cubic ft for transportation of sand and gravel will be notified.
• It will be the responsibility of the concessionaire to dispatch sand and gravel through only those transporters who agree to transport it at notified or less rates.
• An online portal for the sale of sand to small and medium consumers to be launched. Online orders will be booked through divisional or sub-divisional mining office. A mobile app for booking orders will also be launched soon.
• All transactions/payments will be captured through online real-time monitoring system. The sale of sand would be controlled by electronic documentation linked to central documentation, with modern facility, and the daily progress report would be uploaded on the portal.
• It would be mandatory for concessionaire of each block to notify rates of sand on the new portal to be launched by the department, and the summary of online order, quantity of available sand at mine would be available on the portal.
• As per policy, weighment slips for transportation of sand with features like barcodes, QR codes will be stamped with the date and time, and vehicles would be tracked with the GPS/RFID tags which will be integrated with central server.
• The policy also mandates geo-tagging of all mines while conducting physical inspections, and boundaries of mines would be checked using coordinates recorded by GPS device and the monitoring team would be able to check whether any mining activity is going on outside the permitted area or not.
• The mines which are currently auctioned would continue to operate till the completion of their tenure and shall be excluded from the mining rights to be auctioned under the policy.
• 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.
• In the case of Consortium, the combined technical and financial capacity of all the members shall be considered for the eligibility.

Analysis :

• 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 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 infrastructural requirements like a right of way and obtain all clearances before the starting of mining operations.
• The concessionaire would intimate Chief Engineer Drainage seven day in advance when a mining is to be carried out in river bed so that it does not affect the flow of river or damage embankments.
• The authorities have been directed to provide environment and other clearances in a time bound manner and for this purpose Executive Engineer at the Headquarter would act as a nodal authority.
• The government was hopeful of bringing down the rate of sand and gravel to less than Rs 2,000 per 100 cubic ft.
• 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.

Background :

• 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.
• This was followed by consultations at various levels, including at the level of the Chief Minister. Based on these, the department had prepared a draft policy viz. 'Punjab State Sand and Gravel Policy, 2018' and corresponding amendment in Punjab Minor Mineral Rules, 2013 and Agreement Form L-1.

By: Harman Sandhu