New sand policy comes as a breather

The Andhra Pradesh government's decision to do away with the bidding mode for awarding sand reaches has come as a great relief for the construction sector, which since April this year has been reeling under the twin problems of supply shortages and abnormal price.

The authorities have now fixed a rate of Rs 325 per cubic metre inclusive of government cess that comes to about Rs 195 per tonne onsite, besides fixing an end user price for sand after adding the transportation costs.

Under the previous system, sand mining firms used to quote in multiples of the upset price to grab sand reaches while charging high premium from the consumers afterwards. Shortage in supply further aggravated the situation when the AP high court banned sand mining in April this year citing violations of the central environmental laws.

 

“This is a good policy shift effected by the government,” said C Shekar Reddy, vice president of Confederation of Real Estate Developers Associations of India (Credai).

People in general and bulk users in particular were at a huge disadvantage with the prevailing system of auctioning of sand reaches as there was no maximum selling price prescribed for sand by the government, according to him.

Now the government would allot sand reserves to mining firms by a draw system. Also, the government has agreed to allot the reserves to bulk users of Credai and Builders Association of India through the irrigation department, which maintains all the major reservoirs in the state, he said. Sand excavation in reservoirs would also help in desiltation leading to improvement in the water storage capacity of the respective reservoirs.

The availability of sand for the construction sector is expected to improve once the new system is in place in the next couple of weeks. According to an estimate, government and private sectors require about 20 million cubic metre sand each a year in the state.