Tuesday, October 30, 2012

Quarry Auction: Will it Rationalize Price?

Quarry Auction: Will it Rationalize Price?

By Staff Reporter

The Andaman and Nicobar Admn have announced the auction notice for quarry operations in South Andaman District. Five blocks with 40 sites of 0.250 hectares each in Brookshabad village has been identified with two blocks where use of explosives have been permitted and three blocks, where usage of explosives not permitted. The auction will be held on 29 Nov 2012 and the quarry leases will be granted for the period upto 30 June 2015.
Following the meeting of the Standing Committee of IDA held on 17 Oct in New Delhi, the A&N Admn has also decided to invite applications for allotment of sand from identified non eco-sensitive areas.
It's a fact that the Islands are reeling under severe scarcity of construction and quarry materials. One truckload of 20-mm quarry metal costs about Rs 9000/- and a truckload of sand costs about Rs 17000/- unparalleled anywhere in the country. The whole territory is blaming the Admn for the scarcity as well as the rising costs.
It's alleged that non-availability of construction material has severely affected the developmental activities. The Andaman of Chamber of Commerce has been taking up this issue at every possible forum.
The quarry licenses were not renewed this year after the Admn was forced to notify The Andaman and Nicobar Minor Minerals Rules 2012. 
Now, after the notification, the Admn abiding by the Supreme Court dictum has preferred to auction the minor minerals. "In fact, the Home Ministry has not given us any other option, but auction," said Jalaj Srivastav, Principal Secretary Revenue.
A minimum reserve price (MRP) of Rs 4 lakhs per site has been fixed and the lease holder has been permitted to extract a maximum of 12000 cbm per annum from the quarry site, roughly, 2400 truckloads.
Although, the auction has been finalized by the Admn, there is no clarity about fixation of the price for the end product. With auction as the option to lease the quarry sites, it would become the prerogative of the quarry owners to fix the price. "The royalty is increased to Rs 5 from Rs 1.75 per cbm, but we have not fixed any tariff for the end-product," said Jalaj Srivastav.
With different sites going for auction at different rates, it would be a tough task to fix the tariff for the products in the market. It has to be seen that how the Admn acts and regulates the price. Even if the material becomes available, and no checks are put on the price, the Islanders will once again feel the heat.
In the same vein, the Forest Dept has invited application from the Islanders who require sea sand, but the procedures followed will only help the contractors to grab as much as possible with no proper system of scrutiny put at place.

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