New mining syndicate: Just more Congmen than Akalis
Progressive bidding led to formation of groups with deep pockets; old contractors owing allegiance to Cong, Akali Dal bag bids, govt too reaps windfallpunjab Updated: May 23, 2017 09:06 IST
The Congress came to power promising an end to sand mining, liquor, transport and cable television cartels of previous Akali Dal-BJP government. Two months in power and two auctions later — of liquor and sand mines— it’s business as usual. What’s changed? It’s the Congress MLAs whose family, friends and “benami” firms which have bagged higher stakes in liquor and now the sand mining business than the Akalis.
The Captain government’s claim that last week’s auction of 89 mines has broken the “mining cartel” may be just that, a claim.
Investigations by HT revealed that progressive bidding has worked in favour of those with deep pockets, who have outbid rivals to bag the mining contracts by forming syndicates.
One of the main “alliance” in sand business is again of Congress MLA Amrik Dhillon whose son Kamaljit Dhillon had earlier bagged liquor contracts for three districts — Rupnagar, Patiala and Sangrur — with partners Mangat Rai Garg and the Singla group. The auction was held in March soon after the Congress government came to power.
Now the four-time MLA’s family has also bagged contracts for mines in Moga, Ferozepur and Pathankot districts by forming a syndicate with other politicians such as Khem Karan MLA Sukhpal Bhullar’s close relatives and Brinder Dhillon, Congress candidate who lost assembly elections from Rupnagar.
Amrik’s grandson Karanvir Dhillon said the auction was open to all and the bids were made through e-tendering and they bagged them legally.
Family of other Congress leaders who have emerged successful include Sahibjit Singh Sandhu, son-in-law of former Punjab Congress chief Mohinder Singh Gill who is close to a cabinet minister and a Congress MLA.
Some power firms which have bid for the sand mines are allegedly linked to power and irrigation minister Rana Gurjit Singh. When contacted, the minister said: “My friends have taken some quarries, not me.”
Names of many other Congress MLAs figure in the auctions, including Rana Gurmeet Sodhi, Kushaldeep Dhillon and Angad Saini all of whom claimed their friends got the mines.
“Some of my friends from my constituency, Faridkot, have bagged the contracts and a few from Ludhiana. Balaji Minerals, a Chhattisgarh-based mining firm has got the contract and the owner is known to me. These people have got contracts in parts of Ludhiana, Moga and SAS Nagar. But the government did not favour them. It was all done through an open bidding,” Kushaldeep told HT.
Angad Saini, one of the youngest MLAs to make it to the assembly from Nawanshahr, the seat earlier represented by his father Parkash Singh and later mother Guriqbal Kaur, too has bagged a contract. Angad was in London and could not be contacted for comments. Former Congress MLA Jasbir Dimpa too has reportedly been allotted mines in Pathankot. A close aide of Congress MLA Ramanjit Sikki has reportedly bagged a mine in Taran Taran.
AKALIS TOO GET LUCKY
With the change of guard in Punjab, only the “majority stakes” seemed to have changed. While before, some Congress leaders had their fingers in businesses dominated by Akalis, only the trend has reversed this time.
The so-called “old hands” in the trade have again bagged quarries. The close aids of former deputy CM Sukhbir Badal such as Rozy Barkandi and his associate Nishan Singh, Bunty Romana, Gurpinder Grewal, Noni Mann and Parminder Brar, have also bagged contracts in three districts.
The party lines also blur when it comes to business. Kuldeep Makkar, brother of SAD leader from Jalandhar, Sarabjit Makkar, had bagged quarries in earlier auction with Congress links, Sahibjit Singh and Kamaljit Dhillon. Director (mining) Amit Dakha said he was not concerned about who all have taken the bids. “Our concern was to have a transparent system and its effective implementation,” he said.
GOVT’S WINDFALL MAYBE SHORT-LIVED
From Rs 40 crore to a staggering Rs 1,026 crore, the auction of 89 mines have reaped a windfall for the cash-strapped Congress government. But the government’s euphoria maybe short-lived. Some bidders said they had erroneously entered extra zeroes while making the bids. One bidder said he had made a bid of Rs 20 crore instead of Rs 2 crore and another said he entered Rs 45 crore instead of Rs 4.5 crore.
Citing example of Nawanshahr district, a bidder said the total capacity of district’s mines stand at 3.5 lakh metric tonne and tey went for Rs 264 crore. “Is it even realistic? The contractor will have to sell a tipper for anywhere between Rs 5 to Rs 6 lakh to break even. With this, the sand prices will go through the roof. Besides giving the auction amount to the government, the contractor will also have to pay to the land owner and the interest on bank loan. The government over-stimulated the market. Half of the bids will fall flat. Those who stay on course will resort to illegal mining to make good their investment,” he said. And Congress leaders are already worried. “I am worried about what will be the rate of sand after the auctions. I have an election to face in 2019,” a Congress MP said, requesting not to be named. Minister Rana Gurjit believes government’s windfall will not prove elusive.
During the Akali rule, 87 mines went under the hammer through reverse bidding system where the lowest bid wins the contract. But the system fetched poor returns for the government and allowed contractors to extract huge profit margins, keeping sand and gravel prices high.
In progressive bidding, with no cap on prices, there is tendency to form syndicates to quote highest price, at times to disrupt another bid. While government expects it would add more revenue to its kitty and bring down profit margins of contractors, the way some bids have overshot their reserve price manifold, cooling off of sand and gravel prices seems unlikely even if government is able to pump in more supply.
BIDDERS MAY NOT TURN UP
Sources in government said the issue was discussed at the top government level and it was being said that some of the quarries have been auctioned at “exorbitantly” high prices due to which the total bidding amount may not materialise. “Captain has been apprised of the situation and further course of action would be announced after Tuesday, because it is apprehended that some bidders may not deposit the 50% of bidding money by the deadline. If some bidders don’t turn up on Tuesday, the quarries will have to be auctioned again,” said an official.