Now the state government owns all the sand within its borders, but the business of digging it up, and loading and transporting it to the end user is handed off to private contractors and somewhere along the way and the state loses out.
The Tamil Nadu government has tried numerous tomes to clamp down -- if not completely wipe out --the threat of illegal sand mining in the state, but results have been limited. CNBC-TV18's Poornima Murali reports that the state is losing over Rs 19,800 crore from this rampant practice.
Whether it's current Tamil Nadu chief minister J Jayalalithaa or former chief minister M Karunanidhi, illegal sand mining in the state has been a constant irritant. Now the state government owns all the sand within its borders, but the business of digging it up, and loading and transporting it to the end user is handed off to private contractors and somewhere along the way and the state loses out.
According to the public works department, 5,500-6,000 truck loads of 200 cubic feet of sand each is mined on a daily basis. But in reality this is estimated at 55,000 truckloads of 400 cubic feet of sand.
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V Suresh, State President, People's Union for Civil Liberties said, “On paper and technically, sand should have been taken 5 feet from surface level. What we found was very shocking. 30-35 feet of soil of land had been mined and what was left behind was clay.”
The state gets Rs 625 for the billed 200 cubic feet of sand, but a contractor in charge of mining and transport makes somewhere between Rs 4,000 and 6,000 for the same consignment and the end user eventually buys it at Rs 15,000 to 20,000. It’s a loss a cash-strapped state like Tamil Nadu can ill afford.
S Yuvaraj, President, TN Sand Lorry Owners Federation said, “Government is selling 3000 loads of sand at Kancheepuram district. If Government sells sand in other districts, then they should get over Rs 20,000 crores but government annual revenues is just Rs 188 crore. So, there is a huge loss to the exchequer’
With sand prices through the roof, chief consumer like real estate developers has taken a massive hit. Already, projects worth over Rs 10,000 crore have been halted in the state. Developers claim that some contractors have started a black market and that's fanning prices further.
For instance, the actual price of sand, as per the PWD, is Rs 13 per cubic feet, but suppliers buy the same consignment at Rs 60 in the gray market.
Kumar, Chairman, CREDAI (Tamil Nadu) said, “Government is selling this sand including loading charges at 13.80 paise per cubic feet whereas sand at the receiving end was at 82 and slowly coming down to Rs 62 but still a huge gap. We are buying at 60 plus suppliers buy in black market from middlemen and they are charging a hefty price.”
What makes it worse are allegations that when it comes to this abuse, even political parties may have their head buried in the sand. “We learnt there are four-five cartels in the state and they are linked to the ruling party,” V Suresh adds
But the state government has tried to curb this problem on numerous occasions. The most recent steps came in November 2013, when it banned mining in 71 of the 90 sand quarries in the state and over 2,000 workers lost their jobs. But given the heavy losses and the impact on the state's development, the issue of illegal sand mining is all set to become a major talking point in the upcoming elections.