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Business Chennai Exclusive Headlines News

Sand mining and its economics

Chennai, Aug 21 () : Sand mining gives a fifteen times return on investment.

A broker who supplies sand to builders in the city says that for one rupee investment, the miner gets a minimum of Rs 10 and maximum of Rs 15 as profit. As the city is spreading to outer areas where auto-IT industries are located, the real estate activity is booming. The main source of sand comes from the Palar river which has not seen any water for 20 years. This so-called river is 90 km from the city.

Sand is sold in units and each unit costs Rs 2500. A lorry can ferry 6 units. For construction activities in 10 km radius,sand is sent through bullock carts which are cheaper. The sand mafia that caters to Chennai is a Coimbatore-based man who sells the sand through his fleet of 2000 lorries.

As per Government rules for every unit of sand mined, the quarry owner has to pay Rs 675. Rs 1500 goes to mining costs that involve transporting the sand from the riverbed to the godown by tractors and from there by lorries to the site and the bribes to officials at a check-post. The rest is Rs 800 per unit.

A load is six units and the margin is around Rs 5000. The quarry owner takes license to sell five loads. With the help of officials, the same pass is used to transport another five more loads.

Chengalpattu, Arcot, Madhavaram, Pazhayaseevaram and Velappanchavadi are areas that supply sand. 10,000 lorries with sand come to Chennai. The present AIADMK ministry filed around 4000 cases and got Rs 14 crore as fine. The revenue for the Government was Rs 197 crore.

The Madras High Court ordered the closure of 27 quarries. The other part of the State is controlled by an Erode-based contractor. The transfer of Tuticorin Collector who ordered a raid on sand mines shows the power of the sand mafia. With public outcry, the State has constituted a committee to submit a report on the illegal sand mining.

Those in the know say that these two kingpins give a share of the booty to the political parties. The ruling party gets the biggest chunk and the rest in lesser proportions. The officials who get a fat sum ignore court orders and complaints from activists. The crushed sand is now being got from black granite dust and blue metal dust is a cheaper alternative. Pune-based Green Build Products offer a masonry product that eliminates the use of cement and sand and does not require water curing.