Sand price in Bihar shoots up by 30-40%, real estate sector hit

Several districts in Bihar are hard hit with an upward revision in sand prices by 30-40 per cent, sparking fear of slowdown in the real estate sector.

Traders say the escalation in cost has encouraged black marketing and illegal mining of the basic construction commodity.

“The sand price in December was ₹5,400 for a trailer of tractor, now, it has risen to ₹7,000 in Patna. There are reports that the price of sand in other districts has risen by 30-40%,” said Mahesh Lal, a sand trader of Danapur.

“The sand traders are hard pressed as they have to pay royalty to mines department besides charges of loading, ‘raiyati’ (cost of sand), patrolling party and money for crossing road that comes on the land owners,” said Niraj Kumar, who is into sand business and also a transporter. He added, “The mines department thinks that the traders have to just pay royalty, but the business involves other charges too, leaving a petty margin for us.”

Another dealer of sand at Gaya, Arun Yadav, said the price of sand has risen ₹800 per trailer of tractor since December.

The spike in price of sand is being witnessed after the state cabinet took a decision to extend the validity of lease of existing sand mining ghats with 50% increase in lease fee.

A mines and geology official said the need of extending the lease of old lease holders of sand ghat was necessitated after some people filed a petition with the National Green Tribunal (NGT) against the new sand mining policy of the Bihar government. Now, the mines and geology department has moved the Supreme Court to seek relief.

The sharp rise in sand price has spurred smuggling of both yellow and Ganga sand, despite the mines and geology department claiming that raids were being conducted.

Mines commissioner-cum-principal secretary, mines and geology department, Harjot Kaur Bamhrah said, “To check illegal mining of sands, frequent raids are being conducted in districts. The DMs and SPs have a district mining task force, which conducts regular meetings and raids are conducted. FIRs have lodged and offenders booked.”

Another official of the mining department said the department had earned about ₹35 crore this fiscal till December by penalising the sand smugglers.

Boats plying on the Ganga river could be spotted lifting sand from the river bed, making it shallower. The NGT has banned lifting of sand from the river bed.

Seeing the massive smuggling of sand, Patna district magistrate Chandrashekhar Singh on Sunday asked the officials to constitute a special team to nab the smugglers.

Former national president of Builders Association of India, Sachin Chandra, agreed that the rise in the price of sand was going to badly hit the real estate sector.

“The real estate sector has already been hit by a slowdown caused by Covid-19 and the escalation in the price of sand is a bolt from the blue,” he said.

“With a 30-40% rise in sand price, the project cost is going to rise by ₹200-300 per square feet,” he said, claiming, many builders might wait for the price of sand to ease to start their work. He said the margin of income of builders who had already taken money from the buyers was going to face a deep cut due to the rise in price of sand and steel.

Bamhrah said, “The high court has given many rulings that once the royalty is charged by the mines and geology department, the price of sand will be decided by the market forces. However, still the prices are going beyond a particular gradient and we will look into it and start conducting raids so that the prices can be checked.”