SC order on quarries may send gravel prices soaring

Chandigarh, May 14

The order by the Supreme Court of India asking mining contractors to surrender the quarries allotted to them through the now discarded policy of reverse bidding is likely to put the plug on mining of gravel. It will lead to its shortage and subsequent price hike for the common man.
Of the 39 quarries that were auctioned by the previous Akali-BJP government in Punjab under their reverse bidding policy (reverse bidding has been replaced by progressive bidding), 23 quarries are those from which gravel was being excavated in huge quantities. Official sources in the Mining Department have told The Tribune that the closure of these quarries could squeeze the supply of this minor mineral, and thus lead to hike in its price. As against gravel being available for Rs 2,500 per 100 cubic ft last year, the price is now Rs 3,500 to Rs 3,800 per 100 cubic ft.
“We have formed district-level teams to calculate the quantum of material in these mines, which are being surrendered by the contractors. Once this is done, we will compensate them for the period of the mining contract they could not keep the quarries, because of the change in the bidding policy, with a profit of Rs 10 per tonne of leftover minor minerals in the quarries. We expect to complete this process and pay off the contractors by May 25, following which we will be free to re-auction the quarries. Till then, the prices of gravel, and even sand to some extent, could escalate,” said an officer in the Department of Mines.
Interestingly, other than these 39 surrendered quarries, another 171 quarries of sand and gravel are ready to be auctioned. However, the state’s new mining policy, which primarily focuses on controlling the rate at which this basic construction material can be sold, is yet to see the light of day. The government proposes to sell all sand and gravel through common stockyards at government decided rates. The auction of these quarries could thus be put on hold till the new policy is announced.
Already, the prices of gravel have skyrocketed over the past few months, mainly because of a squeeze in the supply. Official sources in the Department of Mines said only 43 quarries (of a total of 110 quarries that were in operation till a year ago) are being operated by contractors. A large number of quarries that were auctioned by the Congress government, through progressive bidding, had been taken by contractors at phenomenal rates. These were later surrendered by the bidders as they could not pay the licence fee. Also, after Chief Minister Capt Amarinder Singh initiated action on illegal mining, the supply has been restricted, leading to the price rise.