Mining mafia exposed as court cancels 83 sand mines in Punjab

Last week, Litmus News highlighted how sand mines were allotted to mafia at rock bottom prices through reverse bidding by earlier Punjab Govt. We exposed how illegal mining and collection of Goonda Tax was still going on, citing the stay order from the Hon’ble High Court. On 12th January, the court gave relief to the ruling Punjab Govt. by dismissing the appeal of sand mafia and cancelling 83 mines. Further, in its order the court took the reply of State Government into consideration,  – that the action of cancelling these mines has been taken to curb the menace of illegal mining, rationalisation of supply and prices and maximisation of State revenue.

The newly adopted progressive auction of 53 mines fetched an estimated revenue of Rs. 1,000 Crores to the present Government, whereas hundreds of old sand mining contracts were allotted to the cartel of contractors headed by mafia at an approximate average of just Rs. 40 Crores per year during the last 10 years. Adding up, the revenue loss to the state in last 10 years was more than 10,000 crores.

Our investigations reveal that the mafia is headed by Kuldeep Makkar, Mohan Pal Singh Pannu, Sahibjit Singh Sandhu, Sukhpal Bhullar (Congress MLA) and Kanwaljit Singh Dhillon (son of Amrik Singh Congress MLA).  It would be interesting to note that Sahibjit Singh Sandhu’s daughter is married to Kuldeep Singh Makkar’s son. By creating cartel of all sand mining contractors, during last 10 years they controlled the sand business in Punjab.

In the ‘reverse bidding method’ cartelization was highly probable due to low cost of auction. In coming times, the cartelization would be reduced if not completely eradicated, because a contractor has to pay 25% of the annual contract amount as security deposit plus the contract money for first quarter of the ensuing year in advance. It would, therefore, be difficult to obtain contracts of large number of mines owing to the cost factor.

To regain their stronghold, the mafia is discouraging the new bidders/entrants in sand mining business in Punjab. They have financed and supported campaigns to stop the new entrants in this business. The mafia would want these mines to be re-auctioned quickly, so that with connivance of mining officials their monopoly could be retained. The new entrants are afraid of this cartel and may not like to participate in the auction if these mines are put to auction in the immediate near future.