Special Correspondent

‘Minimum bid amount for auctioning was wrongly fixed’

1,271 leases for extraction of sand were given between 2000-01 and 2004-05

Current royalty rate has to be taken as floor rate for fixing minimum bid amount

GULBARGA: The alleged incorrect fixing of the minimum bid amount for annual lease of sand mining in the State has resulted in short realisation of Rs. 81.76 crore to the exchequer from 2000-01 to 2004-05.

Official sources said here on Wednesday that the Mines and Geology Department, instead of fixing the minimum bid amount of Rs. 89.19 crore for leasing out 6,939.07 acres for sand mining, had auctioned the bids for only Rs. 7.43 crore.

Sources said that the Comptroller of Auditor General (CAG) of India, who perused the records collected from 18 divisions in the State during 2000-01 to 2004-05, had come out with this revelation. According to the Karnataka Minor Mineral Concession (KMMC) rules, amended in October 2000, the annual lease for quarrying ordinary sand has to be granted through auction. The current royalty rate has to be taken as floor rate for fixing the minimum bid amount.

Royalty on sand was Rs. 15 a tonne up to June 2003 and Rs. 25 a tonne thereafter. As many as 1,271 leases for extraction of sand up to a depth of one meter in 6,939.07 acres in the 18 divisions were granted during the period realising a bid amount of Rs. 7.43 crore through auction.

However, the audit of the Comptroller of Auditor General revealed that the minimum bid amount in these cases were fixed by the authorities taking dead rent as floor rate instead of royalty.

According to the norms of the Public Works Department, availability of sand in one acre at a depth of three feet would work out to 6,400 tonnes. Sources said that based on this assumption the minimum bid amount an acre should have been Rs. 96,000 a year up to June 2003 and Rs. 1.60 lakh thereafter.

The CAG had brought this to the notice of the Government in August 2006. The CAG rejected the contention of the Government that sand deposit would not be uniform in any given piece of land and it was not estimating the availability of sand in the block to be auctioned while fixing the floor rate.

Sources said that the CAG had also pointed out another incident of loss of Rs. 1.01 crore to the State exchequer in the form of dead rent from quarrying of building stones in Hospet division owing to illegal quarrying.