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Sand prices rise over 2-fold in Vizag; builders blame faulty policy

VDS Rama Raju  |  Visakhapatnam 

Sand prices, a key construction material, has risen around 150 per cent in the last four months in Visakhapatnam, raising concerns among the real estate developers in the region.

The sudden spurt in price comes at a time when the state government recently announced its sand policy, paving the way for women self-help groups to participate in sand trading.

Developers in Visakhapatnam, however, alleged several groups having political interests were artificially jacking up prices by making use of the revised sand policy.

"Sand prices are currently ruling at Rs 40,000 per lorry load (each load comprises 17-tonne) in Visakhapatnam, whereas in July this year, a load was available at Rs 16,000-18,000. This means a kg of sand now costs Rs 6 per kg as against an earlier Rs 2.30 a kg," said K Subba Raju, chairman of realtors body Credai's AP chapter, and Ch Ramakotaiah, president of Builders Association of India local chapter.

Developers said the state government was charging a base price of Rs 22,000 for every sand load and added to this, suppliers were incurring an additional Rs 16,000 in terms of freight costs and unofficial payments to several government departments.

Even at the height of sand mining ban, the landed cost of the raw material was around Rs 23,000 in the black market, they said.

To minimise the impact on the overall building material costs, builders have started looking at Robo sand, which offers more strength to the construction and is also a perfect substitute for river sand, which contains 5-10 per cent dust.

Explaining the revised sand policy of being cumbersome, Subba Raju said, "We have to pay Rs 22,000 in bank demand draft per load at the e-seva counters and later take this receipt to the sand ramps followed by paying the loading and toll gate charges, and also paying at check posts."

Comparing sand price in Bengaluru - where it had to be transported 200 km inland, while it is only 40-60 km with respect to Visakhapatnam- SSN Raju, managing partner of RR Developers, said the landed cost in Bengaluru was Rs 35,000-36,000 per load.

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First Published: Mon, November 17 2014. 20:40 IST
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