Amrinder cabinet decides on progressive bidding of mines

Devinder Singh Kohli | May 31, 2018 05:57 PM
Amrinder cabinet decides on progressive bidding of mines


Chandigarh, Having won a major battle on the issue in the Supreme Court, the Punjab Government on Thursday decided to grant mining contracts through progressive bidding, in a move that is expected to boost government revenues and curb illegal mining.

The Supreme Court had earlier this month stamped its approval on the state government’s decision to replace reverse bidding with progressive bidding of mines. It had ordered immediate stop to all mining activity and directed the contractors to remove their machinery from the sites, thus paving the way for the mines to be returned to the state government for re-auction at better commercial terms.

The decision on re-auction of mines through progressive bidding was taken at a meeting of the state cabinet, held here today under the chairmanship of Chief Minister Captain Amarinder Singh, according to an official spokesperson.

Following the decision, the contractors of the mines auctioned through reverse bidding process would be given their advance profit for the balance term of their contracts. A total of Rs 11 crores is expected to be paid out for this purpose. The mines would be re-auctioned through progressive bidding and the advance profit given would be added in the reserve price of the mines at the time of their auction through progressive bidding.

It may be recalled that the Cabinet had taken a decision in its meeting on April 19, 2017 to auction the mines in the state through progressive bidding. It had decided to convert the contracts of mines allotted through reverse bidding as per average per tonne bid received for the mines auctioned through progressive bidding as per mechanism approved by it. Option was given to the reverse bid mining contractor either to convert his contract as per the Cabinet decision or to surrender in accordance with Rule 39 of the Punjab Minor Mineral Rules, 2013.

However, the reverse bid mining contractors preferred to file 83 Civil Writ Petitions in the High Court, where their petitions were disposed of vide order dated January 12, 2018. Thereafter, 42 SLPs were filed in the Supreme Court, where the State government filed an affidavit stating that it was ready to pay advance profit of the reverse bidding for the remaining tenure of contract. On May 10, 2018, the apex court had directed the government to make an assessment by May 18, 2018, and pay the advance profit to the petitioners by May 25, 2018. Accordingly, assessment of mines has been made to pay the profits to auction the mines.

During the proceedings, the State had presented before the High Court and the Supreme Court a strong case on how reverse bidding capped the sale price at the mine/khad but the price got padded up by the time the sand reached the market, leading to inflated sand prices. On the other hand, under progressive bidding, the mine would be auctioned for its true and real value, leading to increased State revenues to the extent of an additional Rs. 400 crores.

This would also curb illegal mining, as mines which were earlier being obtained at throwaway prices would now be auctioned at commercial rates, forcing contractors also to join the government’s efforts to crack down on illegal mining activities, said the spokesperson.


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