Suggestions on the Draft Sand Mining Recommendations

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DRAFT

Sand Mining Recommendations

Ministry of Mines, Government of India GOVERNMENT OF INDIA MINISTRY OF MINES

NEW DELHI

February 2018

Abbreviations

Acronym Full Form

AP Andhra Pradesh

ADMG Assistant Director, Mines and Geology

CAGR Compound Annual Growth Rate

CCTV Close Circuit Television

C&F Agent Carry and Forwarding Agent

CFE Consent for Establishment

CFO Consent for Operation

CG Chhattisgarh

CGST Central Goods and Services Tax

CGM Commissioner of Geology & Mines

CTO Consent to Operate

DEAC District Environment Appraisal Committee

DEIAA District Environment Impact Assessment Authority

DFO District Forest Officer

DGM Department of Geology & Mining

DLSC District Level Sand Committee

DMG Department of Mines and Geology

DSR District Survey Report

EC Environment Clearance

EIA Environment Impact Assessment

EMD Earnest Money Deposit

Acronym Full Form

EMP Environment Management Plan

FY Financial Year

GJ Gujarat

GPS Global Positioning System

GR Geological Report

GST Goods and Services Tax

GVA Gross Value Added

GWSDA Ground Water Survey and Development Agency

Ha. Hectare

HC High Court

HR Haryana

I&C Industries and Commerce

IBA Indian Banks' Association

IBM Indian Bureau of Mines

ISO International Organization for Standardization

IT Information Technology

KTK Karnataka

MCR Mineral Concession Rules

MH Maharashtra

ML Mining Lease

MMDR Mines and Mineral (Development and Regulation) Act, 1957

MMT Million Metric Tonnes

MMTPA Million Metric Tonnes Per Annum

Acronym Full Form

MoEFCC Ministry of Environment, Forest and Climate Change

MoM Ministry of Mines

MP Mining Plan/ Mine Plan

MP Madhya Pradesh

MPSMC Madhya Pradesh State Mining Corporation

M-sand Manufactured Sand

MSS Mining Surveillance System

NA Information Not Available

NAC National Academy of Construction

NCCBM National Council for Cement & Building Materials

NGT National Green Tribunal

NIT Notice Inviting Tender

OB Overburden

PB Punjab

PCB Pollution Control Board

PWD Public Works Department

QL Quarry Lease

QP Quarry Permit

RBI Reserve Bank of India

RJ Rajasthan

RLO Reach Level Officer

RQP Recognised Qualified Person

RTG Real Time Governance

Acronym Full Form

SC Hon’ble Supreme Court

SEAC State Environment Assessment Committee

SEIAA State Environment Impact Assessment Authority

SGST State Goods and Services Tax

SHG Self Help Group

SMC State Mining Corporation

TP Transport Permit/ Temporary Permit

TSMDC Telangana State Mining Development Corporation

TSP Technical Staff Person

TN Tamil Nadu

USGS United States Geological Survey

UK Uttarakhand

UP Uttar Pradesh

VAT Value Added Tax

WALTA Andhra Pradesh’s Water Land and Tree Act, 2002

WCL Western Coalfields Limited

Contents

1. Executive Summary ...... 13 1.1 Background ...... 13 1.2 Overall approach for preparing the guidelines...... 14 1.3 Key findings from state visits ...... 15 1.3.1 Business Models ...... 15 1.4 Best practices across the value chain ...... 18 1.5 Recommendations ...... 20 1.5.1 Identification...... 20 1.5.2 Clearances and approvals ...... 23 1.5.3 Allocation ...... 24 1.5.4 Operations ...... 25 1.5.5 Sale of sand ...... 25 1.5.6 Transportation...... 27 1.5.7 Monitoring ...... 29 1.6 Demand estimation ...... 30 1.6.1 Cement consumption based methodology ...... 30 1.6.2 RBI Index based methodology ...... 31 1.6.3 Direct method based on government projects ...... 31 1.7 Alternate options for sand ...... 32 1.7.1 M-Sand ...... 32 1.7.2 Overburden from coal mines ...... 34 1.7.3 Import of sand from other countries...... 35 2. Introduction ...... 36 2.1 Background ...... 36 2.2 Formation of committee for sand mining guidelines ...... 39 2.2.1 Meeting held on 2nd June, 2017...... 39 2.2.2 Meeting held on 22nd August, 2017 ...... 39 2.3 Understanding the objectives of the guidelines ...... 40 2.3.1 Sustainable sand mining ...... 41 2.3.2 Availability of sand ...... 42 2.3.3 Affordability ...... 42

2.3.4 Transparency ...... 42 2.4 Approach and Methodology ...... 42 2.4.1 Detailed approach and methodology ...... 43 3. State-wise policy and process analysis ...... 52 3.1 Andhra Pradesh ...... 52 3.2 Assam ...... 54 3.3 Chhattisgarh ...... 57 3.4 Gujarat ...... 59 3.5 Haryana ...... 62 3.6 Karnataka...... 64 3.7 Madhya Pradesh ...... 67 3.8 Maharashtra ...... 70 3.9 Punjab ...... 73 3.10 Rajasthan ...... 76 3.11 Tamil Nadu...... 79 3.12 Telangana ...... 81 3.13 Uttar Pradesh ...... 84 3.14 Uttarakhand ...... 86 4. Detailed Comparative Analysis ...... 90 4.1 Regulatory and Legal ...... 90 4.1.1 Rules, regulations and policies ...... 90 4.1.2 Royalty Collection and units applicable ...... 92 4.1.3 Identification...... 94 4.1.4 Clearances and approvals ...... 96 4.2 Business Model ...... 98 4.2.1 Allocation model and realization to state government ...... 98 4.2.2 Operation control ...... 101 4.2.3 Sales rights ...... 103 4.2.4 Types of Sand Concessions ...... 106 4.3 IT infrastructure Analysis ...... 108 4.3.1 Use of IT in Allocation ...... 108 4.3.2 Use of IT in Ordering ...... 110 4.3.3 Use of IT in Monitoring ...... 111 4.3.4 Use of IT in Delivering ...... 112

4.4 District Survey Report ...... 115 4.5 Illegal Mining ...... 116 4.6 Production and Revenue comparison ...... 118 4.7 Reservations offered in states ...... 119 4.8 Type of Mining (Manual/ Mechanized) across the states ...... 121 4.9 Best practices across the value chain ...... 121 5. Recommendations ...... 125 5.1 Value Chain wise recommendations ...... 125 5.1.1 Identification...... 125 5.1.2 Clearances and approvals ...... 128 5.1.3 Allocation ...... 129 5.1.4 Operations ...... 132 5.1.5 Sale ...... 135 5.1.6 Transportation...... 136 5.1.7 Monitoring ...... 138 5.2 Demand estimation ...... 140 5.2.1 Cement Consumption based methodology ...... 140 5.2.2 RBI Index based methodology ...... 141 5.2.3 Direct method based on government projects ...... 142 5.3 Alternate Options ...... 143 5.3.1 M-Sand ...... 144 5.3.2 Overburden from coal mines ...... 148 5.3.3 Import of sand from other countries...... 149 5.3.4 Construction and Demolition waste ...... 150 6. Annexures ...... 152 6.1 Annexure-I: List of members in the committee ...... 152 6.2 Annexure-II: Minutes of meeting ...... 153 6.2.1 Minutes of meeting held on 2nd June, 2017 ...... 153 6.2.2 Minutes of meeting held on 22nd August, 2017 ...... 156 6.3 Annexure-III: States visit plan ...... 160 6.3.1 Meeting Schedule ...... 160 6.3.2 List of documents required ...... 161 6.3.3 List of data required ...... 161 6.3.4 List of questions ...... 162

6.4 Annexure IV Joint Inspection Format ...... 164 6.5 Annexure V Social Impact Assessment of the mining activities ...... 165 6.6 Annexure VI Monitoring Mechanism of Andhra Pradesh ...... 166 6.7 Annexure VII: State wise introduction and Mineral Profile ...... 167 6.7.1 Andhra Pradesh ...... 167 6.7.2 Assam ...... 169 6.7.3 Chhattisgarh ...... 170 6.7.4 Gujarat ...... 171 6.7.5 Haryana ...... 173 6.7.6 Karnataka ...... 176 6.7.7 Maharashtra...... 178 6.7.8 Madhya Pradesh ...... 180 6.7.9 Punjab ...... 182 6.7.10 Rajasthan ...... 184 6.7.11 Telangana ...... 186 6.7.12 Tamil Nadu ...... 188 6.7.13 Uttar Pradesh...... 189 6.7.14 Uttarakhand ...... 191 6.8 Annexure VIII: Note on industry status of M-sand ...... 193 6.9 Annexure IX- First Schedule of Industries (Development and Regulation) Act, 1951...... 213 6.10 Annexure X- G.O. of Andhra Pradesh for promotion of M-sand...... 218 6.11 Annexure XI - M-sand policy of Karnataka as mentioned in the KMMCR ...... 224 6.12 Annexure XII – Section 9 of G.O. 3 of Telangana dated 08.01.2015 ...... 227 6.13 Annexure XIII – M-Sand related bullet points in G.O. 38 of Telangana dated 12.12.2014 ...... 228 6.14 Annexure XIV List of Minor Minerals as per Ministry of Mines Notification dated 10th February, 2015 229

List of Tables

Table 1 Summary of business models followed in different states ...... 16 Table 2 Best Practices across the value chain ...... 19 Table 3 Proposed restriction on holding area for sand mining in a state (Individual and cooperative society) ...... 22 Table 4 Proposed mandatory clearances and their approving authority & timelines ...... 23 Table 5 Summary of the business models that may be followed by the states ...... 25 Table 6 Assessment of m-sand as an alternate to river sand: ...... 33 Table 7 Assessment of OB removal as alternative of river sand: ...... 34 Table 8 States Visited and dates of the visit ...... 44 Table 9 Summary of sand mining policy and process analysis of Andhra Pradesh ...... 53 Table 10 Summary of sand mining policy and process analysis of Assam ...... 56 Table 11 Summary of sand mining policy and process analysis of Chhattisgarh ...... 58 Table 12 Summary of sand mining policy and process analysis of Gujarat ...... 60 Table 13 Summary of sand mining policy and process analysis of Haryana ...... 63 Table 14 Summary of sand mining policy and process analysis of Karnataka ...... 66 Table 15 Summary of sand mining policy and process analysis of Madhya Pradesh ...... 69 Table 16 Summary of sand mining policy and process analysis of Maharashtra ...... 72 Table 17 Summary of sand mining policy and process analysis of Punjab ...... 75 Table 18 Summary of sand mining policy and process analysis of Rajasthan ...... 78 Table 19 Summary of sand mining policy and process analysis of Tamil Nadu ...... 80 Table 20 Summary of sand mining policy and process analysis of Telangana ...... 83 Table 21 Summary of sand mining policy and process analysis of Uttar Pradesh ...... 85 Table 22 Summary of sand mining policy and process analysis of Uttarakhand ...... 88 Table 23 Rules followed by the states ...... 91 Table 24 Royalty applicable in different states ...... 93 Table 25 Identification details for each state ...... 95 Table 26 Environment clearance approving authority for individual mine lease ...... 96 Table 27 Clearances and responsibility ...... 97 Table 28 Summary of Pros and Cons of each business models followed in different states ...... 99 Table 29 Summary of business models followed in different states ...... 100 Table 30 States with operational control details ...... 102 Table 31 State-wise details of sales rights ...... 103

Table 32 State-wise details of the type of concessions ...... 106 Table 33 Use of technology in allocation of sand concession across the states ...... 109 Table 34 Use of technology in sand ordering across the states ...... 110 Table 35 Use of technology in monitoring across the states ...... 112 Table 36 Use of technology in sand delivery across the states ...... 113 Table 37 Use of technology across the value chain of sand mining ...... 114 Table 38 Status of District Survey Report ...... 115 Table 39 Ban on interstate transport by state governments ...... 117 Table 40 Illegal Mining and ban on interstate transport ...... 118 Table 41 Reservations in Sand Mining in different states ...... 119 Table 42: Type of Mining (Manual/ Mechanized) ...... 121 Table 43 Best Practices across the value chain ...... 123 Table 44 Proposed restriction on holding area for sand mining in a state (Individual and cooperative society) ..... 128 Table 45: Proposed mandatory clearances and their approving authority & timelines ...... 129 Table 46 Summary of the business model that may be followed by the states ...... 132 Table 47 Assessment of the m-sand removal as the alternate to the river sand: ...... 145 Table 48 State-wise details for M-Sand ...... 146 Table 49 Assessment of the OB removal as the alternate to the river sand: ...... 148

List of Figures

Figure 1-1 Key elements in value chain of sand mining ...... 14 Figure 1-2 Types of Business Models ...... 15 Figure 1-3 Process to be followed for identification of sand bearing areas ...... 20 Figure 1-4 Allocation model for sand mining ...... 24 Figure 1-5 Sand ordering procedure ...... 27 Figure 1-6 Four-level monitoring mechanism ...... 29 Figure 1-7 Alternate options for river sand ...... 32 Figure 1-8 Process flow for an m-sand unit ...... 32 Figure 2-1 Issues related to sand mining ...... 37 Figure 2-2 Objectives of the guidelines ...... 41 Figure 2-3 Overall approach ...... 43 Figure 2-4 Phases of execution ...... 43 Figure 2-5 Activities during phase - I ...... 44 Figure 2-6 Aspects covered in detailed analysis in every state ...... 46 Figure 2-7 Value Chain of sand mining ...... 47 Figure 2-8 Approach of the analysis ...... 48 Figure 4-1 Parameters for comparison ...... 90 Figure 4-2 Royalty comparison across states (Rs per tonne) ...... 94 Figure 4-3 Different models for allocation ...... 98 Figure 4-4 Sale price comparison across states in Rs/ tonne ...... 105 Figure 5-1 Sand ordering procedure ...... 136 Figure 5-2: Sectoral Mix of cement consumption in India ...... 141 Figure 5-3 Estimation of state-wise sand consumption in FY17 ...... 142 Figure 5-4 Alternate options for river sand ...... 144 Figure 5-5 Process flow for an M-sand manufacturing unit ...... 145 Figure 5-6 Process flow of sand segregation from C&D Waste ...... 150

1. Executive Summary

1.1 Background

Sand is a “minor mineral”, which is defined as mineral meaning building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declare to be a minor mineral; as per the Mines and Minerals (Development and Regulations) Act (MMDR Act). Under the current legal set up, administrative control over minor minerals is with the state governments, which have the powers to make rules to govern minor minerals. Accordingly, different state governments have made different rules for awarding, regulating and administering the sand concessions granted under those rules. Sand is a widely used commodity whose demand is continuously increasing with increasing infrastructure development of the country, and is widely used across the country by common citizens. Sand is an essential mineral and is used along with cement primarily in construction. As per estimate, the demand of sand is around 700 million tonnes per annum (FY17) and it is increasing at the rate of 6-7%. However, production and supply of sand is not uniform and its availability depends upon rain and replenishment rate of sand in rivers. Due to uncertainties in supply, the selling rate of the material varies significantly with shortages in supply leading to black marketing and illegal mining of the mineral. Consequently, there have been various judicial interventions with Supreme Court (SC) and National Green Tribunal (NGT) stepping in to control the situation. Further, the Ministry of Environment, Forest and Climate Change (MoEFCC) have released guidelines “Sustainable Sand Mining Management Guidelines 2016” to promote scientific mining of sand and encourage environmental friendly management practices in order to restore and maintain the ecology of the river and other sand resources. Also, guidelines emphasize on mapping sand resources at the district level, identification of appropriate sites for extraction, appraisal of the extraction process, putting in place the required environmental safeguards, and rigorous monitoring of the volume of extracted material. Special emphasis has been given on monitoring of the mined out material, which is key to the success of environment management plan. And for that, use of IT and IT enabled services along with reengineering the existing processes has been made a part of the guidelines. Despite judicial interventions and the measures undertaken by the Central government and the state governments, issues of illegal mining, environmental damage and high sand prices, which are interlinked with each other, remain across many states. In view of this, a committee chaired by the Union Secretary, Ministry of Mines comprising of officials of state governments has been constituted vide order dated 18th May 2017 to study the existing system of sand mining in various states and prepare a uniform set of guidelines that can be followed by states. The deliberations held by the Committee so far stressed on the need for preparation of District Survey Report (DSR), as prescribed in the Sustainable Sand Mining Management Guidelines 2016 of MoEFCC so that river resources are prudently managed and developed for the benefit of the present and future generations. Further, the Committee engaged the Indian Bureau of Mines (IBM) who along with the consultant team were asked to visit various states to understand the existing policies and processes in sand mining and suggest the guidelines, as mentioned earlier. Also, Section 20A of the MMDR Act gives power to the Central government to issue directions to the state governments for the conservation of mineral resources, or on any policy matters in the national interest, and for the scientific and sustainable development and exploitation of mineral resources. As specified in the Act, Central government may issue directions in respect of the following matters: (i) improvement in procedure for grant of mineral concessions and to ensure co-ordination among agencies entrusted with according statutory clearances; (ii) maintenance of internet-based databases including development and operation of a mining tenement system;

(iii) implementation and evaluation of sustainable development frameworks; (iv) reduction in waste generation and related waste management practices and promotion of recycling of materials; (v) minimizing and mitigating adverse environmental impacts particularly in respect of ground water, air, ambient noise and land; (vi) ensuring minimal ecological disturbance, in terms of bio-diversity, flora, fauna and habitat; (vii) promoting restoration and reclamation activities so as to make optimal use of mined out land for the benefit of the local communities; and (viii) such other matters as may be necessary for the purposes of implementation of this Act.

This report presents the findings emanating from the various state visits and also proposes a common set of recommendations for streamlining sand mining policies and processes in states.

1.2 Overall approach for preparing the guidelines

The policies and the processes governing sand mining in a state has been studied across different elements in the value chain as follows:

Figure 1-1 Key elements in value chain of sand mining

Monitoring of Identificati Sale & Rules & Allocation Clearances Mining operations Consumer on of sand transporati Regulations of sand & operations & satisafction blocks on of sand blocks Approvals transporati on

A total of 14 states were visited by IBM and the consultant team, namely Assam, Andhra Pradesh, Chhattisgarh, Haryana, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and Uttarakhand. Relevant data and documents in line with the overall approach were collected, and structured discussions were carried out with the mining officials to understand the gaps in the existing policies and processes. Key information gathered from the state visits includes the following: . Rules & regulations governing sand mining in the state . Types of concessions and durations of such concessions . Overall business model followed for grant of concession including methodology adopted for reserve price, royalty rates and units of measurements applicable . Clearances and approvals applicable and responsible parties . Monitoring mechanism . Demand-supply situation in the state . Landed cost for consumers . Status of District Survey Reports . Usage of IT/ IT enabled services across the value chain . Promotion of alternate options for sand

Based on the foregoing information, a fact sheet for each state was prepared, and a comparison and benchmarking exercise was carried out thereupon. Subsequently, best practices have been identified and a comment set of recommendations provided.

1.3 Key findings from state visits

1.3.1 Business Models

Each state has its own set of rules and regulations for sand mining, and an important aspect thereof is the overall business model and allocation method followed by the state. Essentially, there are two types of business models: 1. Notified or controlled pricing model 2. Market model

Figure 1-2 Types of Business Models

SHGs/ Panchayat (AP, Fixed Rates for raising of CG) sand at sand reaches

Notified/ Controlled pricing State Corporations/ Bidding for selection of PWD (Telangana, MP*, contractors for raising of TN) sand

Business Models Bidders Forward (Assam**) Tender Based (Assam**)

Market model Bidders Auction Based (HR, PB, Forward (HR, PB, MH) MH)

Bidders Forward (GJ, KTK, RJ, Tender cum Auction (GJ, UP, UK) KTK, RJ, UP, UK)

*MP earlier followed market model also. **For Assam, as per current business model. Assam is undergoing changes in its Rules The business model followed by a state depends primarily on the objective of the state government and the prevalent conditions in sand mining in the state. The most common method of allocation followed across the country is the market model where private contractors are allocated sand mines through competitive bidding with a few states following notified or controlled pricing model where sand mines are allocated to state agencies on nominated basis. Market model In market model, allocation is undertaken using one of the following methods: a) Tender

b) Auction c) Tender cum auction mode In tender, the price or premium against the bidding parameter is quoted by the bidders and the highest bidder gets the mineral concession. In this model, the state earns a fixed amount quoted by the bidder. E.g. Assam is currently following this method, however, their rules are undergoing change and once amended, the state may opt for a tender cum auction method of allocation. In auction, the bidder is aware of the ongoing or highest price or premium quoted by the other bidders and can continuously revise its bid till conclusion of the auction process. The bidder quoting the highest wins the sand block. The realization to the state in this model is high, as the state retains the royalty as well as the auction premium. However, the model also leads to increase in prices for the end consumers, as the state government doesn’t have any control on the prices at which the private contractors sell the sand. Haryana, Uttarakhand and Maharashtra conduct such auctions online. Madhya Pradesh too followed a similar model in the past, and sand concessions in 33 districts were allotted through online auctions. The tender cum auction is a two stage process similar to the one followed in the case of major minerals auctions, where in the first stage along with the technical bid an initial price offer is also submitted. Subsequently, only a selected number of bidders (50% of the technically qualified bidders or as per the notification inviting tender) go to the auction stage. The method has similar benefits and downsides as in the case of simple auctions discussed above. This allocation method is followed in the states of Gujarat, Karnataka, Rajasthan, Uttar Pradesh and Uttarakhand.

Notified or controlled pricing model In this model, the state governments allocate their sand blocks to their state mining corporations or SHGs or Panchayats on nomination basis. Clearances and approvals are procured by the state only and mining operations are handled either directly by the government agency or by the raising contractors that are hired. Further, the sale of sand is undertaken by the state government and revenue accrued accordingly. Prices are notified by the government under this model. In Telangana, sale price at the sand depot, which is located near to demand centres, is fixed including the royalty, and the entire sale proceeds go to the Telangana State Mineral Development Corporation. Also in Andhra Pradesh, the maximum sale price (landed basis) has been fixed district wise. Other than Telangana and Andhra Pradesh, Madhya Pradesh also follows this model in 18 out of the 51 districts. Tamil Nadu allots sand mines to their Public Works Department (PWD) and Chhattisgarh to their Gram Panchayats on nomination basis. Further, Madhya Pradesh is also in the process of drafting a policy for allocation of sand mines on nomination basis to the Gram Panchayats in 33 districts on application.

The summary of the models followed by different states and their productions & revenues is tabulated below:

Table 1 Summary of business models followed in different states

Business Sub-model Process followed Separate Revenue Production Model accounting FY17 FY17 State for royalty (Rs. (Yes/ No) (MTPA) Crores)

Notified or Nomination Andhra Notification for Not controlled Not Applicable 10 Pradesh* extraction of sand Applicable pricing model

Business Sub-model Process followed Separate Revenue Production Model accounting FY17 FY17 State for royalty (Rs. (Yes/ No) (MTPA) Crores)

Market model Competitive Assam** Offline tender No 5.6 30-35 Bidding

Notified or Nomination Yes Allocation to Chhattisgarh controlled 9.67 10.6 Panchayats pricing model

Market model Competitive Tender cum Yes Gujarat 31.2 115.1 Bidding forward auction

Market model Competitive Yes Haryana Forward e-auction 19.2 265.9 Bidding

Market model Competitive Tender cum Yes Karnataka 4 25.2 Bidding forward auction

Notified or Nomination Allocation to Yes Madhya controlled MPSMC (in 18 49.14 240 Pradesh*** pricing model districts)

Market model Competitive No Maharashtra Forward e-auction NA NA Bidding

Market model Competitive No Punjab Forward e-auction NA 43.1 Bidding

Market model Competitive Tender cum No Rajasthan 56.8 235.9 Bidding forward auction

Notified or Nomination Yes Tamil Nadu controlled Allocation to PWD 5.83 86.33 pricing model

Notified or Nomination Yes Allocation to Telangana controlled NA 434 TSMDC pricing model

Uttar Market model Competitive Tender cum Bidding No 47.7 Pradesh forward auction 5.9

Market model Competitive Tender cum Uttarakhand No NA 335.3**** Bidding forward auction

1.4 Best practices across the value chain

A detailed comparison of the states on various policy and process parameters was conducted and best practices identified. Rules & Regulations Andhra Pradesh, Karnataka and Telangana have well defined rules and regulations for sand mining and alternative materials such as m-sand. These states have separate policies for sand distinct from other minor minerals. Further, the mining departments in these states handle the regulations and overall administration of sand mining operations. Lastly, these states have been regularly updating their policies for sand and other minor minerals taking into account the developments in the sector. Identification Gujarat prepares a detailed geological report through a technically qualified person for each identified sand block and puts the sand blocks for auctions based on the quantity of resource established by the report. Apart from establishing the resource quantity, the report contains details of the area, DGPS Survey, infrastructure and environment, geology of the area, drainage and geomorphology, exploration status, geological mapping, laboratory studies of the samples etc. Clearances and approvals Prior clearances and approvals before auctioning or allocating the blocks helps minimize risks for the bidders and reduces the lead time for development. In many states such as Andhra Pradesh, Chhattisgarh, Punjab, Maharashtra, Telangana and Tamil Nadu, the mining department procures the environment clearance. Business model If the objective of the state government is revenue maximization, then a two stage tender cum auction model as is being followed in Gujarat can be adopted where the sand bearing areas are notified for auction after preparation of detailed geological report containing the estimated quantity of sand reserves in the block. However, if the objective is to keep prices affordable and accordingly regulated, then notified or controlled pricing model can be adopted as is the case with Telangana and Andhra Pradesh. Operations & Monitoring Telangana is doing better in terms of control over sand mining operations, as TSMDC appoints raising contractors through competitive bidding to extract sand on its behalf, and it can mandate stricter compliance with environmental norms as part of its contracting.

The monitoring mechanism should not only be limited to physical checking by identified personnel but should include the use of technology in checking the transport permit, keeping the record of sand consumers for verification and monitoring the excavation sites. In view of this, Andhra Pradesh follows a 360o monitoring starting from the reach level to delivery of sand to the end consumers. Transportation In Andhra Pradesh, all sand carrying vehicles are registered with the state mining department and are GPS enabled. Further, all the vehicles carrying sand have a valid online generated transport permit along with a scan code or a hologram mark to ensure that the single transport pass is not photocopied and used more than once. Further, the transport monitoring team has a scanning device to scan the transport permits, and once scanned the entire detail, such as volume, origin point (reach/ stockyard), destination, previous scan detail, etc., are displayed on the scanning device. The transit pass generated at the reach/stockyard also contains the route of delivery from the origin to the destination, and the same can be cross checked with the GPS device at the check points if there is any deviation in the route designated and the actual route followed. Further, through the GPS device, any unauthorized entry of a transportation vehicle near the reach/ stockyard can also be checked. Sale of sand Andhra Pradesh has constituted a five member district committee in all the districts which includes the Superintendent of Police, District Transport Commissioner, Executive Engineer of Irrigation department and ADMG under the chairmanship of District Collector. The committee notifies the price of sand for the district including transportation, loading/unloading and ramp maintenance fee. There is a 24 hours operational call centre, which gives a call to all the consumers to enquire whether the amount that is charged for sand is within the government’s notified limit. Consequently, the landed price of sand in the state has been under control. Apart from Andhra Pradesh, Telangana is also relatively well placed in terms of sale of sand in the state, where only TSMDC can sell the sand. Further, the sale can only be through the online portal developed by the mining corporation. Anyone who wishes to purchase sand in the state has to register on the online portal and subsequently login to place its order. After logging in, the portal displays the entire list of reaches/ stockyards along with the sand available in those reaches/ stockyards and the corresponding quality and price of sand. The consumer can filter/ sort the reaches/ stockyards based on location, quality and price and book based on the most suitable lease/ stockyard. Alternate Policy Andhra Pradesh, Karnataka and Telangana have devised a separate policy for m-sand in the state and are offering incentives for the promotion of m-sand. Andhra Pradesh and Telangana have even granted industry status to m- sand manufacturing units in their states. Karnataka has made various efforts to raise awareness among the citizens to accept m-sand in place of river sand, and the state surpasses all other states by a huge margin in terms of m-sand production. Karnataka has also notified a policy for import of sand from other countries to meet the sand deficit in the state. Also, Gujarat has reduced royalty rate for m-sand units for its promotion. Considering these facts, Andhra Pradesh, Karnataka and Telangana are relatively better than other states in terms of promotion of alternate options for sand.

Table 2 Best Practices across the value chain

Activity State Activity

Regulatory Andhra Pradesh, Detailed rules and regulation specially for sand/m-sand Framework Karnataka, Telangana

Identification Gujarat Detailed Geological Report

Andhra Pradesh, Clearances & Chhattisgarh, Punjab, Clearances and approvals are taken by the department approvals Maharashtra

1) Andhra Pradesh & Andhra Pradesh and Telangana has low landed prices. Gujarat has Telangana (Low Prices) Business model a detailed and transparent model for allocation (a two stage tender 2) Gujarat (Revenue cum auction process) which is undertaken post preparation of a maximization) geological report on the sand block.

Operations & Andhra Pradesh & Telangana has departmental controlled mining operations. Monitoring Telangana Andhra Pradesh has robust monitoring system

Transportation Andhra Pradesh Government monitors delivery of sand up to consumer.

Sales AP & Telangana Sale of sand is done only through online portal.

Incentives have been given to m-sand industry in Andhra Pradesh Alternate Sand Karnataka, Andhra and Telangana. Preference given for quarrying lease to m-sand Policy Pradesh, Telangana units in Karnataka. Gujarat has reduced royalty for m-sand units for its promotion. Import sand policy in Karnataka notified. Consumer Andhra Pradesh Andhra Pradesh measures consumer satisfaction index. Satisfaction

1.5 Recommendations

1.5.1 Identification

Identification deals with the preparatory work before a sand block is allocated or bid out for mining. The mining department of the state should estimate district wise demand and thereupon for the entire state and accordingly come up with the requirement of further allotments. The department needs to obtain the khasra map of the area and conduct spot inspection and confirm from other departments regarding availability of area to check if the area is not reserved for some other purpose and can be allotted for sand. Further, if the inspector finds that the block is not lying in the restricted zone based on foregoing assessment, and that the area is available for sand extraction, the area should be geo-referenced and pillars should be erected at the corners.

Figure 1-3 Process to be followed for identification of sand bearing areas

DSR of the DIstrict Need assessment JIR Report Technical Report (As per MoEFCC) (Department) (District Committee) (Geologist)

District Survey Report

The district survey report (DSR) shall be prepared by the state government as per the MoEFCC’s Sustainable Sand Mining Management Guidelines 2016. As per the guidelines, states need to undertake the replenishment study, which shall provide the following outputs: • Annual deposition rates of sand from a river • Deposition stretch of the rivers The above outputs shall help in estimating the annual quantity of sand available in a particular district. Further, the states need to complete the replenishment study, as follows:

• The cross-section survey should cover a minimum distance of 1.0 km upstream and 1.0 km downstream of the potential reach for extraction. • The sediment sampling should include the bed material and bed material load before, during and after extraction period. • Develop a sediment rating curve at the upstream end of the potential reach using the surveyed cross- section.

• Using the historical or gauged flow rating curve, determine the suitable period of high flow that can

replenish the extracted volume.

• Calculate the extraction volume based on the sediment rating curve and high flow period after determining the allowable mining depth. • Flood discharge capacity of the rivers based on cross section history

While the need for undertaking the replenishment study is well understood, such assessments are not being undertaken at the state level. It is envisaged that there is a need to inter-alia build capacity at the state level that trains the relevant staff in undertaking replenishment studies. A preliminary suggestion in that regard is depicted below:

Demand estimation

Based on the estimated demand, the mining department should assess the need for further allotment of sand concessions. Even if the demand of a particular district is low, adjacent sand deficit districts can be considered for fulfilling their demand. Joint Inspection Report

A comprehensive Joint Inspection Report (JIR) should be prepared by the following departments/concerned officials: - District Collector (Chairperson) - Revenue department - Public Works department - Water Resources department - Mines and Geology department - Geologist - Environment & Forest department - any other relevant department, as per state’s requirement The purpose of JIR is to provide a comprehensive assessment of the sand available in each identified block and overall provide a go-no go decision. The JIR team responsible for identification should fill the format containing the various parameters that restrict sand mining as per the state’ rules and MoEFCC guidelines. During the identification stage itself, the details should be noted down and based on those details and other considerations that may be facing the state, it should be decided whether the block should be allocated for mining or not. Further, once the decision is taken, the entire format along with considerations based on which the decision has been taken should be uploaded on the departmental website which shall be available for public view. The responsible officers should submit the joint inspection report with clear recommendations to the concerned authority in charge of sand mining in the state. Geological Report

A detailed geological report containing details of the area, DGPS survey, infrastructure and environment, geology of the area, drainage and geomorphology, exploration status, geological mapping, laboratory studies of the samples etc. of each sand block should be prepared by the Assistant Geologist/ Geologist of the district in which the block lies, before putting it for auctions/ allotment. The potential areas of the quarry lease should be identified and demarcated using DGPS and topographic and geological maps prepared using Total Station. Area Restrictions

The lease area to be granted for auction should be capped at 100 Ha (in case of co-operative societies) and 50 Ha (in case of Individual) to avoid concentration of sand supply in a few hands. A smaller area will lead to usage of manual methods, as compared to larger areas where mining is mechanized. Also, the minimum area can be fixed at 5 Ha. In addition, the maximum area a person can hold for sand mining in a district through multiple leases should be restricted to 100 Ha.

Table 3 Proposed restriction on holding area for sand mining in a state (Individual and cooperative society)

S. No. Parameter Minimum Maximum Holding limit in the Time period of area area state allotment

1 For Individual 5 Ha. 50 Ha. 100 Ha. 3-5 Years

2 For Co-operative 5 Ha. 100 Ha. 100 Ha. 3-5 Years society

1.5.2 Clearances and approvals

It is suggested that the responsibility of procuring the clearances and approvals should be given to the department responsible for sand mining in the state. Delay in getting the clearances might impact the financial/economic feasibility of the project for the lessee which then can encourage him to bypass the regulations to be followed. In addition, this also adds up to the cost of the final sand sale price. Hence, the clearances and approvals can be obtained by the state department before allocating or bidding out the block for mining. A specific set of regulations and clearances should be mandated to be prepared in all the states, and the states can be free to mandate any other clearance that might be required depending on the local conditions of the state. A fixed time line should be attached for all the clearances required, and the responsible person should get it done within the specified timeline. Further, the applications for getting the approvals should be made online. Below is the list of clearances, their approving authority and their timelines that can be mandated across the country

Table 4 Proposed mandatory clearances and their approving authority & timelines

Clearance Preparation by Approving authority Time period Mode of for approval process

Mining Plan & To be prepared by a Mining Department 45 days + 1 online filing Reclamation technically qualified person month and approval Plan and shall have validity of five extension years. However the bidder/ lease holder may revise the mining plan subject to approval by approving authority.

Environment As per existing guidelines As per existing guidelines As per existing guidelines and Clearance (EIA, and notification of MoEFCC and notification of MoEFCC notification of MoEFCC EMP, Mining Plan)*

CTO/ CFE State Pollution Control 0.5 months online filing Board and approval

Reclamation By Lease Holder/ Permit Competent Authority As per Plan As per Plan Plan Holder/ Contractor (Implementation)

permits/lease should be granted stretch wise so that the requisite safeguard measures are duly implemented and are effectively monitored by the respective regulatory authorities.

1.5.3 Allocation

The allocation model to be considered by a state depends on the objective of the state. If the state’s objective is revenue maximization then it can follow the market model, however if the state desires to keep the prices and operations under control, then it can follow the notified price model.

Figure 1-4 Allocation model for sand mining

State's objective

Notified/ Controlled pricing Market model model

Allocation to state corporations/ SHGs/ Forward Auction Model Panchayats

1.5.3.1 Market Model

1.5.3.1.1 Forward Auction Model Under the market model, the state can follow the forward auction model with a two stage bidding process. The notice inviting tender should mention the eligibility criteria besides providing other standard details of Earnest Money Deposit (EMD) and bidding process. Overall, it should provide the following details: 1. Information Memorandum (IM) having details of the mine including geological report/ technical report 2. Eligibility criteria (technical and financial eligibility criteria) 3. Reserve price to be based on the % of royalty payable by the bidder 4. Bid Security/ EMD 5. Other affidavits/ annexures/supporting documents The bidding should be completed by the month of March and Sep each year so that the operations can begin from April and October each year respectively. The practice should be followed uniformly as it can streamline the process of allocation efficiently. Royalty in this model should be on ad-valorem basis and should not be collected, as a lump sum amount on annual basis. Further, there should be a strict monitoring mechanism to compute the exact quantity of sand extracted from the sand blocks.

1.5.3.2 Notified pricing model

1.5.3.2.1 Nomination Basis Sand blocks should be notified by the state only after getting the mining plan approved and environment clearance obtained. The blocks can be allocated to any relevant state corporation or co-operative societies of the village for the

purpose of excavation and loading work with the main control being with the mining department/ state corporation only. Prices and selling under this model remains with the state/ state nominated agencies. For this model also to be successful, strict monitoring of sand mining operations is required. Further, the state government should also specify the rates of transportation, and keep the sand supplies sufficient so that the prices are not increased artificially by the transporters.

Table 5 Summary of the business models that may be followed by the states

Model  Notified Pricing/ Controlled Pricing Market Model

Selection method Nomination basis Competitive bidding

Selling price Fixed Rates Market Rates

Operations control SHGs/ Panchayats/State Corp./PWD Private Contractor/ Lease holder

Sales rights with State Govt./ Department Private Contractor/ Lease holder

Profit from sale of sand State Govt./ Department Private Contractor/ Lease holder

Profit basis Sale Price minus mining related exp. Sale Price minus Premium minus mining related exp.

Mining expenses borne by State Govt. Private Contractor/ Lease holder

Revenue sources for Govt. Sale of sand From auction premium, royalty

1.5.4 Operations

Irrespective of the allocation model and whoever has the control over operations, sand mining should take place only in accordance with the terms and conditions of the environmental clearance and the lease deed or license, and methods approved in the quarrying plan. Apart from these, mining should be undertaken, as per the regulations laid down in the Sustainable Sand Mining Management Guidelines 2016 by the Ministry of Environment, Forest and Climate Change.

1.5.5 Sale of sand

A proper regulatory mechanism is required to ensure adequacy in supply of sand and to keep any exorbitant increase in price under check. Amongst others, the entire process of sale and delivery of sand should be made online to bring in more transparency in the entire process and provide for better control over illegal operations. The state mining department should create a website and/ or app for sand ordering by the public. The sale of sand in the state should be only through that portal and direct booking of sand through offline means should be made illegal. We propose two mechanisms for the online sale of sand depending on whether there is a free market for sand in the state or the prices are regulated by the government. Under market model

In case of market model, all the lessees/ certified dealer in the state should register themselves on the online portal/ mobile app. For registering, lessee/ certified dealer will have to enter the details of its concession/ stockyard, location, quality of sand expected on a weekly basis as per the approved mining plan, etc. Once registered, the online portal/ app will display the name of the reach/ stockyard and sand could be booked by the consumer from those leases/ stockyards and prices up to delivery level. Further, the lessee/ certified dealer need to regularly update the sand available in the reach/ stockyard, and they can decide the price at which they want to sell their sand. Anyone who wish to purchase sand in the state will have the following options for buying: 1. Mobile app 2. Online portal 3. Customer care/ telephone call 4. Local mining department office The consumer needs to register on the portal and login using his/her credentials (Aadhar card based only). After logging in, the portal will display the entire list of reaches/ stockyards along with the sand available in those reaches/ stockyards and the quality and price of sand. The consumer can filter/ sort the reaches/ stockyards based these parameters, namely location, quality and price, and book from the lease/ stockyard he/she wishes to. The consumer should also have the option to purchase the sand by ordering at customer care or applying at the local mining department office. Controlled market prices

In case the prices are regulated by the state government, the only difference from the previous model is that the price of sand shall be uniform across the state based on the quality. And a consumer after logging in, may choose the reach/ stockyard from which he/she wishes to purchase the sand. The payment for booking the sand in both the cases should be made on the portal/ app so that proper accounting of the sale of sand can be maintained by the government. A payment receipt should be generated online after payment on the portal/ app and the transit pass should be generated on the reach/ stockyard after showing the online payment receipt. A pictorial representation of the step-by-step process that should be followed for online sand ordering is depicted below:

Figure 1-5 Sand ordering procedure

Stockyards should be made around all the major consumption hubs in the state based on their estimated demand. Further, the state can get the supply potential across those major consumption hubs from the district survey reports prepared by the mining department. And if any gap exists in the demand and supply of sand across those hubs, leading to increased sand prices, the state can allocate more sand reaches around the hubs or try to promote alternative options.

1.5.6 Transportation

Transportation is the last step in the value chain of sand mining, and it needs to be regulated to ensure that cartel formation among the transporters does not take place leading to high prices of sand in the state. It is more important in states that are sand deficit and need to transport sand over long distances to reach the consumption hubs. A district committee should be formed in all the districts comprising of members from the transport department, police department and mining department to fix the transportation rate of sand in the state and the committee should meet on a monthly basis to review the implementation of prices. The transport mechanism needs to be integrated with the ordering portal for the rates notified district-wise. All sand carrying vehicles should have a valid transport permit. And the transport permit should have a scan code along with a hologram mark to ensure that the single transport pass is not photocopied and used more than once. Further, the transport monitoring team should have a scanning device to scan the transport permits, and once scanned the entire detail, such as volume, origin point (reach/ stockyard), destination, previous scan detail, etc., should be displayed on the scanning device.

All sand carrying vehicles in the state should be registered with the mining department and GPS installation in all sand carrying vehicles should be made mandatory. The transit pass generated at the reach/stockyard should also contain the route of delivery from the origin to the destination along with pricing information, and the same can be cross checked with the GPS device at the check points if there is any deviation in the route designated and the actual route followed. Further, through the GPS device, any unauthorized entry of a transportation vehicle near the reach/ stockyard can also be checked. While booking the order for sand, the person issuing transport permit should be mandated to enter destination, distance between plot and destination, vehicle number etc. in the system. After scanning, the e-permit, invoice date & time and validity date & time is sent to the bidder, which needs to be written on the transport permit. Validity of transport permit is calculated based on distance between plot and destination. After validity time is over the transport permit stands invalid. The officers involved in monitoring should be provided with the android application using which the transport permit can be checked anywhere on road. As soon as the transport permit gets scanned through using android application, all details of transport permit such as plot details, vehicle details, validity time etc. should be fetched from the server. This means, if anything is re-written on transport permit and attempt is made to reuse the same, it can be traced immediately. Registering of transport permit on server can be done using website, using android application (smartphone with internet) or even through SMS (smartphone without internet). This implies that transport permit can be registered on server even if only mobile phone range is available on plot. Various reports can be generated using the system showing daily lifting reports and user performance report. This way the vehicles carrying sand can be tracked from source to destination.

1.5.7 Monitoring

Monitoring is extremely crucial to ensure that sand mining operations are legal and environmentally compliant. Accordingly, the State / State agencies need to create and establish a robust system to monitor and measure the mined out mineral at each lease location and its transportation in the state. In that regard, a 360 degree monitoring mechanism should be put in place, as follows.

Figure 1-6 Four-level monitoring mechanism

L4- Indirect Monitoring

L3 End Consumer/Us age

L2 Transportatio n Monitoring

L1 Reach Level Monitoring

Level 1- Reach level monitoring

For monitoring of the active reaches: a. Production/supply to be made available online for the general public b. After every two year mandatory audit of the quantity extracted and quantity permitted along with the replenishment rate of the river in the last two years. c. Mandatory e-pass/ e-permit should be made available at reach level for transportation of any sand by any GPS enabled vehicle with provision of entering the vehicle number of the sand carrying vehicle and expected delivery address and customer name/ mobile Number. Also provision should be made available for stockyards/ stockiest of sand for further selling. In case of nomination based (controlled pricing) business model, the margin of private stockiest should be capped over a fixed percentage of notified prices. d. Real time data capture for transportation

Level 2 - Transportation monitoring

To make transportation monitoring effective and useful, all the sand carrying vehicles (tractors/ trucks) should be registered with the department and GPS equipment should be installed in all the sand carrying vehicles. Weighbridges should be installed at all the stockyards, active reaches to ascertain the exact quantity of sand being transported in the vehicle. Check posts with CCTV cameras should be established at all major consumption centers

to check if all the transporting vehicles are carrying a valid transport permit. The transport permit generated should contain a hologram so that one permit cannot be re-used by generating photocopies of the permit. This mandatory e-pass will help monitoring in following ways:  GPS location can track discrepancies in the delivery address of customer vs. mentioned in the e-pass  System can generate alarm in case of delivery of sand or particular quantity is not delivered for the specified client/ address and officers can accordingly physically check  Mobile app enabled devices can check the e-pass during physical checking at check posts or surprises checks. After scanning the e-pass, invoice should be generated to show the starting point and destination of the vehicle along with the validity date & time of the e-pass.  Trucks carrying sand without any e-pass/ e-permit may be confiscated as per the state rules and laws.

Level 3 - End consumer monitoring/ bulk consumer

A call center should be established to enquire from customers about the amount that is charged for sand which will keep the state government updated about the price of sand in the state and further it will help to check if there is any discrepancy in the sale price of sand within the same district. The mobile number of the customer can be obtained from the e-pass/e-permits generated. The number of the call center should be advertised so that it reaches the general public through which anyone in the state can register his/her complain related to the sand, be it in terms of price or any other grievance. Profiles of customers should be analyzed such as delivery of sand at the same address, more than the estimated usage, as mentioned in purpose, etc. Further, surprise checking should be conducted by the district level committee staff as per instructions of the monitoring agency. This will reduce sand ordering by middlemen for resale purposes.

Level 4 - Indirect monitoring:

Indirect monitoring can be done by determining sand consumption through quantum of cement sales in the state, as sale of cement is quite organized and data is easily available at the state level and district levels for the same. From district-wise cement consumption, further trend of sand consumption can be derived. Any out of trend figures in sand consumption/demand can be analyzed further.

1.6 Demand estimation

The following three methods are suggested for estimation of sand demand: 1. Cement consumption based methodology 2. RBI Index based methodology 3. Direct method based on government projects

1.6.1 Cement consumption based methodology

In this method the demand of sand consumption in a state or district is based on the cement consumption in that state/ district multiplied by a conversion factor in terms of assuming a normative cement to sand consumption ratio. Following inputs are required for estimation. Inputs: 1. Cement consumption in the state/ district 2. Conversion factor - cement to sand consumption ratio

A. Cement consumption Cement consumption in the state can be obtained from cement sales considering any of the following sources: 1. Sales data from sales tax officials/ GST officials (State Revenue department/ Tax Department) 2. Cement companies for the sale data of the districts and state 3. Sales data from cement dealers present in the state

B. Conversion factor A rough estimate shows that sand consumption factor is around 2.5 for each unit of cement consumed, i.e. if cement consumption in the district is 1 million tonnes, then sand consumption shall be around 2.5 million tonnes.

1.6.2 RBI Index based methodology

The state-wise demand of sand is India for FY17 has been estimated based on the following factors:

 Normative cement – sand mixture ratio of 1:2.5  India’s construction GVA  India’s state-wise construction GVA

In this method, based on the data released by RBI (Handbook of Statistics on Indian Economy), ratio of construction GVA of state with construction GVA of India is calculated. Further, that number is multiplied by the cement sales in India. Once cement consumption of the state is known, the same is multiplied by the factor of 2.5 to derive the sand consumption.

Accordingly, the following process can be used for estimating the demand of sand in the state: 1. India’s construction GVA from RBI’s Handbook of Statistics on Indian Economy. 2. States construction GVA from RBI’s Handbook of Statistics on Indian Economy 3. Calculate ratio of both 1 and 2 above 4. The actual consumption of cement in India is 292 million tonnes in FY17. 5. Cement consumption of the state considering the ratio arrived in step# 3 above 6. Using the normative cement to sand mixture ratio of 1:2.5, the total sand consumption in the state can be computed.

1.6.3 Direct method based on government projects

This method is based on the assumption that the requirement of sand for government sector is 65% and for private construction is around 30% - 35% of the total sand consumed. In this method, map all government projects in a state and the requirement of course and fine aggregates for those projects from different departments such as Public Works Department, Urban Development Department, Road Construction Department, etc. E.g.: Sand demand for government projects in a state is 10 million tonnes. Then the state’s total sand demand shall be 10*100/65= 15.38 million tonnes. Using the three methods discussed above, the demand of sand in a state can be estimated, and it can also be used to estimate the requirement of sand at district levels. Further, the method can also be helpful to forecast the demand of sand in the states in years to come. Once a proper demand estimation is done then only planning to supply the required quantity by increasing or decreasing the number of reaches or promotion of alternate options can be taken care of.

1.7 Alternate options for sand

Considering the large deficits in supply of sand, alternate options need to be promoted, as:  Alternate supply option will reduce pressure on river sand  Supply of alternatives may reduce prices of river sand  Alternate options can cater to the needs of monsoon season/ peak season The following three alternatives are proposed:  m-sand  overburden removal from coal mines  import of sand

Figure 1-7 Alternate options for river sand

M-sand Can be beneficial for states having sand stone, basalt, granite waste, quartz etc.

Can be beneficial for coal bearing areas and nearby Sand from OB of Coal

cities Alternate OptionsAlternate

Can be beneficial and cost effective for coastal cities Imported Sand like Chennai, Mumbai, Vizag, Kochin, Goa, Mangalore, Thiruvananthapuram etc.

1.7.1 M-Sand

M-sand is the most common alternate of river sand, which has already gain quite prominence in some of the southern states. It is produced by crushing of rocks, quarry stones to a required size of 150 microns. To arrive at the required grain size, existing coarser hard rock deposits are crushed in a series of crushers and the crushed material is segregated in different fractions as suited to various construction activities. The sand obtained through this process is further refined by removing fine particles and impurities through sieving and washing. In the final stage, the sand is tested for various quality aspects, which is considered better for construction. As per IS-383, the chemical characteristics and strength are similar to the river sand, and same type of applications can be served using m-sand.

Figure 1-8 Process flow for an m-sand unit

Stone quarry Cone Vertical shaft Manfactured (blasting Jaw crushers Screening crushers impactor sand drilling)

Table 6 Assessment of m-sand as an alternate to river sand:

Parameter Assessment

Technical Acceptable  As per IS-383, the chemical characteristics and strength of m-sand are similar to that of river sand  Product is moisture free, as it is made of crushed granite stone (or other raw materials)  Silt content in river sand is around 0.45% whereas in m-sand it is about 0.2%.  There is no shrinkage or reduction in the quantity due to the absence of moisture.  Grading curve of river sand as well as m-sand falls within the IS 383 zone II limits.  Bulk density and specific gravity of m-sand are comparable to those of river sand.  Bond strength of m-sand concrete is marginally higher than that of river sand concrete.  The mortar made of m-sand shows higher compressive strength and modulus for masonry when compared with the values for masonry using river sand.  Water absorption in m-sand is higher, 1.6% as compared to 1.15% in river sand.  About 7.8 % of particles of natural sand pass through 150 micron sieve, whereas 18 % of m- sand particles pass through the same. As per IS 383:1970 limit is 0-20% for crushed stone sand

Tests Carried on M-sand

 Rapid Chloride Permeability Test (RCPT) conducted to test the durability of m-sand mixes indicate the RCPT values for concrete with m-sand are less than 1000 coulombs , which indicate a very low chloride permeability and good quality dense concrete.  Water permeability test with m-sand are 14 mm and 11 mm depth of penetration for M25 and M40 grade respectively which indicate very good dense structure of concrete.  Drying shrinkage of M25 and M40 grades concrete samples with m-sand are 0.043% & 0.048% respectively, which indicate shrinkage are within values estimated from Drying Shrinkage estimation curve.

a) Manufacturing cost (Including margins): = Rs500 x 30 = Rs 15000/ Economically Feasible b) Royalty : =Rs 60 x 30 = Rs 1800/ c) DMF : = Rs18 x 30 = Rs 540/ d) Transportation cost : =Rs3.3 x 80x 30= Rs 7920/ e) GST = 5% x (Rs15000+Rs1800+Rs540+Rs7920) = Rs 1263/ f) Total landed cost of 30 tonne of m-sand at Bengaluru = a + b +c + d +e = Rs 26,523/ g) Per tonne cost of m-sand=Rs 883/tonne h) Actual sale price of m-sand= Rs. 925 - 975/ton i) Actual sales price of river sand at Bengaluru (35 ton) = Rs 70, 000 to 1,00,000 ~ Rs 2000 – 2850 per tonne

Current status As of now, only around 180 plants in few states like Karnataka, Andhra Pradesh, Gujarat and Telangana are operational.

Table 1: m-sand production status in different states State M-Sand Policy available in No. of M-sand manufacturing Production of M-sand (MMT) State units Andhra Pradesh Yes 6 <1

Gujarat Yes 2 <1

Karnataka Yes 164 20

Tamil Nadu Under development NA 3.24

Telangana Yes 6 7.2

There is a need to promote m-sand units on pan-India basis and create awareness for m-sand usage given the overall environmental and illegal mining concerns associated with river sand mining. Any further reduction in cost and prices of m-sand will make it a more attractive alternative. Accordingly, there is a need to ensure that m-sand units are less capital intensive to further reduce the production cost, create awareness towards usages of m-sand and to attract investments in the sector.

1.7.2 Overburden from coal mines

The overburden spread over in situ coal seam needs to be removed for extraction of coal to an external dump till sufficient space is created for internal back filling by acquisition of land nearby coal bearing area. Further, this overburden dump needs to be re-handled at the time of closure of mine for land reclamation. As per mine closure plan 80% of the extracted overburden will be used for backfilling the excavated area up to ground level and remaining 20% overburden can be used for producing sand. Studies conducted by the Central Institute of Mine and Fuel Research show that processing of overburden yield 60 to 65% sand, 30 to 35% clay and 5% pebbles. The theoretical tradeoff between sand recovery and its quality should be quantified through laboratory tests. Western Coalfields Limited has already taken the initiative to segregate sand from the overburden. WCL has committed to supply sand at one fourth of the market price to NIT Nagpur, which has entered a memorandum of understanding to supply sand for the low cost housing projects under Pradhan Mantri Awas Yojna (PMAY). Further WCL has proposed to set up a sand segregation plant of 200 cubic metre per day capacity near Nagpur.

Table 7 Assessment of OB removal as alternative of river sand:

Parameter Assessment

Technical Acceptable Studies conducted by Central Institute of Mine and Fuel Research show that processing of overburden yield 60 to 65% sand, 30 to 35% clay and 5% pebbles

Economically Feasible WCL has committed to supply sand at one fourth of the market price to NIT Nagpur, which has entered a memorandum of understanding to supply sand for the low cost housing projects under Pradhan Mantri Awas Yojna (PMAY).

Implementable option in All coal bearing states e.g. Jharkhand, Bihar, Madhya Pradesh, Chhattisgarh, Andhra Pradesh, states Maharashtra, Gujarat etc.

Scalable Option WCL has proposed to set up a sand segregation plant of 200 cubic metre per day capacity near Nagpur. Approx. OB removal every year is 200 million m3 and Can supply 20% of total quantity = 40 MM3 for processing.

WCL removes 200 million cubic meters of overburden every year. Based on the estimates mentioned above, 24 million cubic meters of sand can be produced by WCL alone in a year. If the entire overburden removed in the country is used for sand segregation, a substantial portion of sand demand can be met through an otherwise waste material. The initial estimate on the potential is tabulated below:

Approx. OB removal every year 200 MM3

Approximate OB available for processing every Year 20% of total quantity = 40 MM3

Likely quantity of Sand production every year 60% of available quantity = 24 MM3

Revenue generation every year by sale of sand @ Rs410.69 / m3 Rs 985.6 Crores

The quantity of sand that can be produced by processing the overburden left from Western Coalfields Limited alone is 24 million cubic meters. If all the seven subsidiaries of Coal India Limited are instructed by the Government to process and segregate sand from the overburden left out, around 150 million cubic meters (283 tonnes) of sand can be processed, which is around 35% of the total sand consumed in the country at present. And besides meeting the requirement of sand, this would also ensure that a productive use of otherwise waste material is done. Initiatives need to be taken to commercialize the same in sync with state department’s policy related to sand. Also, a separate policy is required for formulation of sand from OB. Along with this, an awareness campaign is required for consumer to shift some demand to this alternative.

1.7.3 Import of sand from other countries

Another way to meet the demand could be to import sand. This method can especially be beneficial in states which do not have deposit rocks from which m-sand can be manufactured or the coal deposits, from the overburden of which sand could be processed. But this will be only economical for the states near coastal regions. Some of the south-east Asian countries have ample sand available in their country, which if not removed could lead to floods. The sand could be sourced from those countries and imported to Indian ports to meet the deficit. A couple of factors to be considered while importing sand from other countries: 1. Sand should qualify for the IS 383 quality standard as well as be free from any phyto-sanitary issues. To ensure this, the imported sand should have quality checks at 3 points. a. In the country from where the sand is sourced. The supplier should provide this certificate for the ISO standard and phyto sanitary certificate. The supplier should also provide a certificate that the imported sand is free of any metal. b. At the port where the sand comes, before packing the sand in sealed packets. A third party hired by the state should conduct this test to ensure compliance. c. At the stockyard, where sand is stocked. This survey could again be conducted by a third party service provider to ensure compliance. 2. The imported sand should be sold only in sealed packets to avoid mixing of imported sand with locally available cheap sand and selling at the price of imported sand in the name of imported sand. Another benefit of selling in sealed packets could be that wastage of sand could be avoided. 3. The MRP of sealed sand bags should be mentioned and the imported sand should be sold at the MRP itself at the stockyards that should be established near the major consumption hubs. Karnataka is already in the process of drafting a policy to allow for sale of imported sand in the state.

2. Introduction

This chapter briefly describes the background of the study, need for the sand mining guidelines and objectives for the sand mining guidelines as well as the approach towards the execution of the study.

Sand is a naturally occurring granular material composed of finely divided rock and mineral particles. It is one of the most widely used commodity for different purpose with majority in construction activities. Sand & gravel are mined world-wide and account for the largest volume of solid material extracted globally. It is used primary in construction of house, buildings and other infrastructure projects (e.g. bridges, roads, airports etc.) thereby provides both economic and social benefits to the country. Based on a rough estimation, the total sand consumption in India is around 700 million tonnes in 2016-17 which has been derived from the cement consumption. Sand is mainly found in the oceans, rivers, lakes & reservoirs, streams, flood plains, and hills & mountains. In India, the main source of sand is from river plains, in-stream mining, coastal areas and agricultural fields. Among all the sources, river bed is the most common and prevalent source of sand in the country. Sand is mined / removed from these areas either manually or mechanically using machineries.

2.1 Background

Regulatory Provisions for sand (minor mineral) Sand is classified as a minor mineral and it is defined in the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), as follows: “minor minerals means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the official gazette, declare to be a minor mineral”. The term `ordinary sand' used in clause (e) of Section 3 of the MMDR Act, 1957 has been further clarified in rule 70 of the MCR, 1960 as: (iv) Purposes of stowing in coal mines, (v) For manufacture of silvicrete cement, (vi) Manufacture of sodium silicate and for (vii) Manufacture of pottery and glass. Further, Section 15 of the MMDR Act empowers state governments to make rules for regulating the grant of mineral concessions in respect of minor minerals. The regulation of grant of mineral concessions and complete administrative control for minor minerals is, therefore, within the legislative and administrative domain of the state governments. Hence, under the power granted, the state governments have framed their own minor minerals concession rules and policies related to the same. Further, Section 23C of the MMDR Act, 1957 empowers state governments to frame rules to prevent illegal mining, transportation and storage of minerals. It has been observed that the demand of sand has increased over the years due to significant infrastructure development in the country. The legitimate supply of the sand is not enough to cater the demand growth. Due to this, illegal mining activities have increased resulting in draining of sand and damage to the environment. There are instances when the illegal mining activities has been noticed and reported by different mediums. Also Constitutional bodies like Supreme Court, High Courts of the states and National Green Tribunal (NGT) have banned illegal mining activities in different states to prevent the damage to the environment. This has further constrained the supply of this commodity. Since in majority of the states, sale prices are not regulated, supply crunch makes the prices of sand to increase further and in many cases exorbitantly.

Ministry of Environment, Forest and Climate Change (MoEFCC) has issued Sustainable Sand Mining Management Guidelines, 2016, in March 2016 which, inter-alia, addresses the issues relating to regulation of sand mining which provides for a detailed program for ensuring that mining of river sand is done in a sustainable manner. The guidelines emphasise on the preparation of District Survey Report (DSR) which needs to be prepared for each district . The guidelines also present a set of rules to be followed for operations and monitoring part. These further emphasise on making resources available, mapping of these resources at the district level, identification of appropriate sites for extraction, appraisal of the extraction process, putting in place the required environmental safeguards, and rigorous monitoring of the volume of extracted material. Special emphasis is given on monitoring of the mined out material, which is key to the success of environment management plan. Usage of IT and IT enabled services for effective monitoring of the quantity of mined out material and transportation is also part of the guidelines issued by MoEFCC. Despite the different measures taken by the Central government and the state governments, issues of unsustainable mining practices affecting ecology of the rivers, high sand prices and lack of availability remains. There has been many instances of mining ban by the Supreme Court, respective High Courts of the states and NGT. Following are some recent instances of illegal and unsustainable mining where courts had intervened e.g.: . Rajasthan: In November 2017, the Supreme Court put a blanket ban on mining of sand and bajri in Rajasthan as the mines were operating without the environmental clearance. . Tamil Nadu: In November 2017, Chennai High Court ordered to shut down the sand quarries in Tamil Nadu within a period of 6 months. . Uttar Pradesh: In June 2017, the National Green Tribunal directed the Uttar Pradesh government to ensure that no mechanized sand mining is carried out in the Yamuna riverbeds in Kanpur district. Further, in May 2016, the NGT banned illegal extraction of sand through mechanized mining in Gonda and Faizabad districts of Uttar Pradesh and ordered a probe into the unauthorized activities there. . Uttarakhand: The Uttarakhand high court on 28th March 2017 put a four-month ban on mining in the state during which no fresh lease or prospective licence for mining can be issued. . Haryana: The new rules in Haryana in 2012 were framed addressing the observation/directions of the Hon’ble Apex Court as contained in orders dated 27.02.2012 passed in the case of Deepak Kumar. . Maharashtra: NGT order dated 30th May 2017 regarding illegal sand mining in the middle river Bhima, District Sholapur, Maharashtra

The issues facing sand mining are discussed as follow:

Figure 2-1 Issues related to sand mining

Environmental Non-availability of damages due to High sand prices Cartelization sand illegal mining

i. Rampant mining of sand without regard for the resource

Since many years, sand and gravel have been used in the construction of roads and buildings. Today, demand for sand and gravel continues to increase. With the increased demand of sand, over exploitation of existing resources is taking place which is leading to a negative impact on the physical characteristic of the stream and cause environmental issues. There have been several attempts by the Central government, state governments and judiciary to restrict illegal sand mining, most notably the Supreme Court order in 2012 that banned all sand mining, including that on land less than

five Ha, without the approval of Ministry of Environment, Forest and Climate Change (MoEFCC) department. Hon'ble Apex Court in Deepak Kumar's case (supra) extensively examined the environmental concerns, in the context of mining of minor minerals, considering its impact on the environment. The Apex Court observed that Extraction of alluvial material from within or near a streambed has a direct impact on the stream's physical habitat characteristics. These characteristics include bed elevation, substrate composition and stability, in-stream roughness elements, depth, velocity, turbidity, sediment transport, stream discharge and temperature. Altering these habitat characteristics can have deleterious impacts on both in-stream biota and the associated riparian habitat. NGT in 2013 issued notices against violators of SC orders, existing mining leaseholders to get environmental clearance from MoEFCC, giving them a time of 3 months to do so. ii. Non-availability of sand in many cities Construction industry is expected to rise at the CAGR of 6% during year 2016-2020 period as compared to 2.95% during 2011-2015. With India’s unprecedented construction boom, the demand for sand has become a multibillion dollar market and is poised to scale further at an expeditious rate. Demand for precious sand is such that it has created a massive mining industry stretching throughout India. However despite the magnitude of the demand, supply of the vital raw material has been dwindling continuously over the past few years owing to environmental restrictions imposed by the Centre and other governing institutes. One of the major factor for unavailability of sand in some cities is that sand is not available near to some of the major consumption hubs and transportation of sand across long distances tends to be uneconomical. Other factor is there is no alternative of the river sand which is available in many of the states due to various reasons. iii. Sky-rocketing price of sand in many places Unavailability of sand and sky-rocketing price of sand are two sides of the same coin. Due to the population growth which has consequent construction activity there is a huge demand for sand in the country. In some of cities where there are no nearby sand reaches, it creates a huge demand and supply mismatch. This mismatch coupled with cartel formation among the miners & transporters and in absence of robust monitoring mechanism or regulation by the government has led to sky-rocketing price of sand in these cities, such as the prices of sand in Bangalore and Mumbai have reached between range of Rs 70,000 to Rs.1,00,000 for a single truck of 30 tonnes. iv. Cartel formation in sand mining Although State governments has started allocating the blocks on auction basis to bidders in the states, but to control the supply and to control the prices, bidders may form the cartel to keep their margins high. In absence of any robust mechanism it’s tough to control the cartelization issue till the sales rights are with the state governments. These factors clearly bring out the issues related to sand mining and sales in the country. There is a need for increased regulation and improved monitoring processes in the sand mining. Some of the states have been able to restrict illegal mining or regulating the prices or improving the availability through different policy interventions. Further, some of the states have utilized the IT systems in the value chain of sand mining for improving the sand mining and sales management system. However, to cater to the issues discussed above, it is extremely important to have a more focused and uniform policy guidelines across all the states. This will include adopting the best practices across the value chain by different states which may help to control the issues of illegal mining to a great extent, improve the sand availability and may control the prices in the market. In view of the issued discussed above and to tackle all the problems discussed above, a committee was constituted to study the existing system of sand mining in various states and to prepare sand mining guidelines. The details of the committee have been discussed subsequently in following sections.

2.2 Formation of committee for sand mining guidelines

A committee chaired by the Secretary, Ministry of Mines, Government of India along with officials from state governments was constituted by order dated 18th May 2017, to study the existing system of sand mining in various states and prepare sand mining guidelines which addresses the concerns of this sector. The committee comprised of Additional Chief Secretaries, Secretaries, and Joint Secretaries, Controller General of IBM, Directorate General of Mines, and Directors/ commissioners in Central and state governments. The list of members in the committee is shown in the Annexure-I. The terms of reference of the Committee was to suggest sand mining guidelines with a view towards a transparent and sustainable system for extraction of sand for ensuring supply of adequate sand at reasonable rates in the states. The committee met twice on 2nd June and 22nd August 2017 in New Delhi and discussed on various matters related to the existing challenges in the sector, issues at hand, information required for the study etc. All the points discussed during the meetings were captured in the minutes of meeting attached in the Annexure –II. The summary of the meetings are mentioned below.

2.2.1 Meeting held on 2nd June, 2017

In the first meeting, the Chairman emphasized on the need for sustainable mining of sand without causing damage to the environment and preparation of District Survey Report (DSR) contained in the Sustainable Sand Mining Management Guidelines 2016 issued by MoEFCC so that river resources are prudently managed and developed for the benefit of the present and future generations. He also discussed about the processes that needs to be delineated in the guidelines. By briefly mentioning the sand mining practices being followed in various states of India, he requested the members to give a brief overview of the methodology adopted in mining of sand in their state and the problems being faced by them in this regard. The representatives from the states of Telangana, Haryana, Assam, Uttar Pradesh, Chhattisgarh, and Madhya Pradesh gave a brief overview of the sand mining practices being followed in their respective states and the issues related thereto. Finally, the Chairman requested the states to make available the following information: (i) Whether the state has assessed the demand/supply situation and efforts made to meet deficit from other states, or by use of manufactured sand, and if there is a surplus whether there is a policy to allow availability of sand to other states: (ii) The historical evolution of the state policy regarding sand since 2010 and a copy of the present policy including administrative systems in place today: (iii) Whether all districts have made DSRs, if so a copy of DSR of one district to be submitted to the Committee; and (iv) Any suggestions in this regard.

2.2.2 Meeting held on 22nd August, 2017

Before the meeting, a “Fact Sheet” was circulated to the states to get the information related to the following: (i) The assessment of demand/supply situation of sand in states. Efforts made by states to meet the sand deficit from other states and whether state policies permit excess sand in respective States to be sold in other States (ii) Historical evolution of the state policy regarding sand mining since 2010. (iii) Status of District Survey Reports and (iv) Other suggestions. The information provided from the 14 states was compiled before the meeting and the Chairman started the meeting by discussing the compiled “Fact Sheet”. Post discussion on the “Fact Sheet”, the members of the committee took

turns to highlight the positives in sand mining and also presented the challenges faced and the considerations underway for sand mining, in their respective states. Some of the discussion points of the presentations are:

 no scientific estimates of the sand demand;  consideration of import of sand;  increase in lease tenure;  demarcation of the mining area using geo-referenced coordinates and monitoring by surveillance;  state control;  process of lease allocation;  pricing mechanism;

At the end, the Chairman of the committee, Union Secretary (Mines) stressed on: (i) Demand estimation of sand by the states (ii) Importance of increasing confidence among states and end-users in adopting the usage of M-sand

In addition, Chairman instructed the M/s Indian Bureau of Mines (IBM) representatives along with the respective consultant’s team to carry out visits to various states to understand the existing models of sand mining and to study the Minor Mineral Rules in each state. He also stated that some other issues like, assessment of the quality of District Survey Reports being prepared by the states, method of allotment, quality checking norms for imported sand, study of the sourcing of sand by major consumers and government agencies and legal aspects of semi mechanical and mechanical mining. Ministry of Mines engaged M/s IBM and M/s WAPCOS Ltd (as a consultant) to visit different states to understand the existing system of sand mining in the states and suggest a comprehensive guideline for replication by the states. The objectives on the basis of which guidelines need to be formed has been discussed subsequently. Based on these objectives the approach of the guidelines were formulated as discussed in the chapter 2.4.

2.3 Understanding the objectives of the guidelines

Based on study of the background & various related documents and also the discussion with various stakeholders, four main objectives are expected to be achieved through the guidelines as mentioned in the figure below. Each of the objectives have been dealt with details below.

Figure 2-2 Objectives of the guidelines

Sustainable Affordability

Availability Transparency

2.3.1 Sustainable sand mining

Sand mining in India has reached to a level threatening the environment and ecosystem. Hence sustainable mining is extremely important for the country. Sustainable sand mining is a fundamental concept that promotes environmental protection, limiting negative physiological, hydrological and social impacts underpinning sustainable economic growth. This should be carried out for the following: (i) To ensure that sand mining is done in environmentally sustainable and socially responsible manner, and ensuring the conservation of the river equilibrium and its natural environment by protection and restoration of the ecological system (ii) To ensure availability of adequate quantity of aggregate in sustainable manner (iii) To improve the effectiveness of monitoring of mining and transportation of mined out material (iv) To avoid aggradation at the downstream reach especially those with hydraulic structures such as jetties, water intakes etc. and to ensure the rivers are protected from bank and bed erosion beyond its stable profile (v) To ensure there is no obstruction to the river flow, water transport and restoring the riparian rights and in-stream habitats (vi) To avoid pollution of river water leading to water quality deterioration (vii) To prevent depletion of groundwater reserves due to excessive draining out of groundwater (viii) To prevent ground water pollution by prohibiting sand mining on fissures where it works as filter prior to ground water recharge (ix) And to maintain the river equilibrium with the application of sediment transport principles in determining the locations, period and quantity to be extracted.

2.3.2 Availability of sand

Sand and gravel have long been used as aggregate for construction of roads and building. As the demand for these materials continues to rise, the mining of aggregates has reached a level scarcity that may threaten the economy growth. Availability of sand to meet with the growing pace of urbanization and infrastructure development has become an issue and a grave point of concern. Thus, the guidelines of sand mining should take into account the factors responsible for this scarcity and to implement control steps so as: (i) To ensure that sand is available to suffice the needs of citizens & government for construction activities throughout the year by sustainable mining practices only (ii) To ensure no illegal sand mining and unsustainable mining practices happen (iii) To promote alternatives i.e. manufactured sand, artificial sand and alternative technologies in construction materials processing for reduced dependence on naturally occurring sand and gravel. (iv) To see the feasibility of imported sand from other countries such Malaysia and Philippines

2.3.3 Affordability

Sand, a key construction material, has been a source of angst for developers. Booming construction activity and scarcity of sand has resulted in high prices. Hence it is extremely important for the guidelines: (i) To ensure the availability of sand at reasonable prices throughout the year by increasing supply (ii) To control the price from supply side rather than through administrative mechanism (iii) To provide appropriate pricing models for keeping the prices under check (iv) To reduce illegal mining, closure of quarries and smuggling of sand to neighboring states that are the major factors influencing quick escalation of sand price (v) To establish routine and responsive check on these factors to have substantial effect on sand price making it cheaper and reasonable for use in construction activities (vi) To create awareness and promote production and usage of alternates of river sand through incentives

2.3.4 Transparency

Transparency in any process is a measure of control of flaws in the system and also builds trust among the stakeholders of the process. Hence, it is extremely important for the sand mining system is to have utmost transparency in the entire value chain right from the identification of reaches, allocation to transportation and sale of sand, so as to do away with other means and profiteering through means like illegal mining, smuggling of sand to neighboring states etc. The objective of the guideline is to suggest sand mining guidelines with a view towards a transparent and sustainable system for extraction of sand for ensuring supply of adequate sand at reasonable rates in the states. To increase and promote transparency the guidelines should also consider the increased usage of information technology systems in the value chain of sand mining and sales limiting human interventions and chances of discretionary power. Based on the understanding of the objectives, an approach and methodology towards execution of the study was devised and finalized in consultation with the relevant stakeholders. It has been discussed subsequently.

2.4 Approach and Methodology

Our overall approach has been designed as a three-layered framework keeping in view the goal and objectives of the study. The approach identifies key guiding factors providing direction to the assignment and provide the right perspective for achieving the outputs/ deliverables. Successful implementation of the outputs will lead to the desired outcomes. The following framework describes our overall approach.

Figure 2-3 Overall approach

Outcomes Sustainable sand mining Guidelines

Outputs Sand mining guidelines to be adopted by all the states

Guiding Business Regulatory Commercial Environmental Operational/ IT Model Aspects Aspects Aspects Value Chain systems Factors

2.4.1 Detailed approach and methodology

Based on the objective and scope of work provided by Ministry of Mines (MoM), a systematic methodology was formulated to carry out the study. The below mentioned tasks were executed in phased manner right from the data collection and stakeholder consultation to the final recommendations. The phases of execution have been shown in the figure below.

Figure 2-4 Phases of execution

Phase II Phase IV •Stakeholder • Detailed •Recommen consultation • State-wise comparative •Alternate dations and data policy and analysis options collection process •Demand analysis estimations Phase V Phase I Phase III

The approach and methodology was developed to comprehensively cover all required aspects of the study. Each of the phases are dealt in details subsequently.

2.4.1.1 Phase I: Stakeholder consultation and data collection

Phase I: Stakeholder consultation and data collection

Team Utilized:

Objective: To understand the sand mining policies  IBM members (Team 1 & 2) – Regional and procedures across the value chain in the Controller of Mines and Deputy Controller of respective states and to collect the relevant data for Mines detailed review and analysis  Consultant’s members (Team 1 & 2) – Project Manager and Analysts

Key Outputs: 1. State Visit Plan 2. Data and documents collected - Latest mineral concession rules, relevant government orders, sand mining policies, policies and data related to alternates of sand, sand mining and sales process related data etc.

The major activities carried out in this phase are shown in the figure below:

Figure 2-5 Activities during phase - I

States prioritization State visits •Prioritizing the states for stakeholder •Stakeholder consultation consultation and data collection •Data collection and aggregation

2.4.1.1.1 States Prioritization This phase began with the preparation of a list of states for visit for data collection and stakeholder consultation. The list was prioritized based on our prior experience of executing the related assignments and also based on various other factors such as amount of infrastructure development in the states, amount of sand reserves in the states, states with policies and procedures etc. Special emphasis was given on covering most of the regions of the country i.e. central, west, north, south and north-east. The prioritized list was discussed with the Ministry of Mines and finalized based on their inputs. 14 states were selected for the visit as mentioned in the table below.

Table 8 States Visited and dates of the visit

Region Name of the states

South Telangana Andhra Pradesh Tamil Nadu Karnataka

Schedule 15th & 16th December 20th to 22nd November 13th & 14th December 11th & 12th December

West Rajasthan Maharashtra Gujarat

Schedule 19th to 21st November 8th & 9th November 22nd & 23rd November

North Punjab Haryana Uttarakhand

Schedule 13th to 15th November 13th to 15th November 8th to 10th November

Central Chhattisgarh Uttar Pradesh Madhya Pradesh

Schedule 13th & 14th November 6th & 7th December 27th to 29th November

North-east Assam

13th to 15th December

The detailed state visit plan was prepared for each of the states that included stakeholders to be met, date of meeting, detailed discussion areas, list of data and documents required etc. The detailed visit plan is attached as Annexure – III. Two teams were formed having members from IBM and the consultant. Seven states were covered by each team as per the plan.

2.4.1.1.2 State Visits Each state was visited by the respective teams as per the detailed state visit plan. The visit mainly covered the stakeholder consultation and the data/ document collection for the detailed analysis in the subsequent phases. The stakeholders’ discussion points were related to the following:

 Applicable rules and regulations of the sand mining policy and concession rules  The baseline and present condition of sand mining and sales in the state  Issues and challenges of the states Major areas covered during the visit are:  Information on sand mining policies in those states  Key learnings that can be opted to make the current process more efficient  Problems related to sand mining that the policy has helped to resolve and those that still exist  Process of award of sand reaches, and identify any gap/loophole in the process  Understanding the roles of various stakeholders of sand mining and sales like District Level Sand Committee members, State Level Committee members, Self Help Groups (SHG), if any, etc.  Views of the stakeholders on the existing policy framework and how to fill the gaps, if any.  Information related to Acts, Rules and Regulations applicable in each state for sand mining.  Information for royalty and taxes applicable in each state for sand and m-sand.  Information on the illegal mining activities and efforts to stop the same.  Information on the demand-supply assessment done by each state and methodology adopted by states for these.  Information on the business models followed by each state and success of the business model  Information related to transparency maintained in complete process of sand mining by state governments, online mode followed etc.  Information on resource availability, production level and other technical details from concerned department of state government.  Information on pricing strategy followed by states for deciding the sale prices of sand and revision interval for sand prices.

2.4.1.2 Phase - II: State-wise policy and process analysis

Phase II: State-wise policy and process analysis

Objective: To understand the sand mining policies Team Utilized: and procedures in details based on detailed study  IBM members (Team 1 & 2) – Regional of all the information received during the previous Controller of Mines and Deputy Controller of phase Mines

 Consultant’s members (Team 1 & 2) – Project Manager and Analysts

Key Outputs: 2. Detailed review of sand mining policies and procedures

In this phase, detailed study on the following aspects were carried out:

Figure 2-6 Aspects covered in detailed analysis in every state

Legal and Sand mining Sand pricing, Monitoring regulatory process royalty and Mechanism framework mapping taxes

The data obtained from the different states was analyzed in details to present the existing sand mining and sales management systems for each state. The areas covered under each aspect are:

2.4.1.2.1 Legal and regulatory framework In this section, the existing legal and regulatory framework of sand mining in each of the state was reviewed focusing on two main aspects i.e. presence of appropriate legal and regulatory measures and its effectiveness. Review was carried out on the following:

 applicable acts, rules and regulations governing the sector and the processes of sand mining and sales, amendments/ notifications/ government orders, responsible authority for various provisions  latest policy and legal changes brought-up/proposed in the states to carry out sand mining in sustainable way  internal as well as external environment that affects the functioning of sand mining and sales directly or indirectly by analyzing the past trends and also from the views of various stakeholders discussed during phase-I.  steps taken to control degradation of the environment  steps taken to prevent adverse consequences of illegal mining of sand on the environment  legal framework in place to prevent illegal inter-state transportation of sand

2.4.1.2.2 Sand mining process mapping Standardization of the processes are extremely important and brings efficiency in the system. However, the states follow different sand mining processes. Hence, our goal in this section was to map the complete value chain of sand mining in each state and use the information for formulation of the guidelines having standardized processes. To do the same, detailed information on the value chain was gathered by the review of documents and with the help of the discussions carried out during phase – I. In addition, a number of reaches were also visited to have an understanding of the processes as well. The whole section included mapping of the tasks being carried out right from the identification of the reaches to the sale of sand to the end user. In addition to this a responsibility matrix was also prepared mapping the responsibilities of individuals in different processes within the value chain. Some of the details that were captured during the value chain mapping are:  The agencies involved in identification of sand reaches  Process of allotment of sand reaches

 Process of appointment of contractors/excavators for sand mining (if required)  Responsibility of monitoring & surveillance of sand mining  Transportation mechanism of sand  Mode of sale of sand in each state  Use of technology in the processes such as allocation, monitoring, dispatch etc.

Below is the pictorial representation of the processes involved in the sand mining value chain for some of the states.

Figure 2-7 Value Chain of sand mining

Monitoring of Identificatio Sale & Rules & Allocation Clearances Mining operations Consumer n of sand transporati Regulations of sand & operations & satisafction blocks on of sand blocks Approvals transporatio n

However, this is not a standard process and a number of states follow different processes as well.

2.4.1.2.3 Sand pricing, royalty and taxes Pricing In this section, in-depth study was conducted to understand the sand pricing mechanism being followed in the respective states. Some of the states are using the government notified price while in some states, the prices are market linked. The team interacted with the stakeholders to assess the reasons of the particular pricing mechanism at a particular state as well as price of sand at the end-user level under different pricing mechanism. The pros & cons and irregularity in the prices under different pricing mechanism was also assessed. The questionnaire developed in the previous phase was used for getting the information from different stakeholders. This also helped in understanding the views of the stakeholders in the pricing as well. Royalty and Taxes In this section, the data on the royalty and taxes on the sand mining operations were collected from each of states. An in-depth study on the royalty and taxation structure was conducted. This included study of trend in royalty and taxes to understand the impact of the royalty and taxes on the demand, supply and prices of sand. In addition, the concept and method of royalty calculation in each of the state was focused upon and the pros and cons of every concept was analyzed from the perspective of the government. Since, this is one major source of revenue collection for the states, the issues with the design of the royalty structure and its implementation in each of the state was also analyzed as this could hinder the realization of what could otherwise be achieved.

2.4.1.2.4 Monitoring Mechanism

In this phase, the team gathered information on the experience of each of the state in illegal mining. A number of details were collected such as number of approved sand reaches, operational sand reaches, location and area of the reaches, etc. for all the states. The reaches were shortlisted from where illegal mining activities have been reported and detailed analysis was done to understand the impact of illegal mining in the respective reach. Further special emphasis was given on the steps taken by the respective authorities to curb illegal mining in the states and its impacts on illegal mining.

Further, the team looked into the various initiatives taken by the respective states to curb illegal mining and the outcomes of those steps. These outcomes play an important role in formation of the sand mining guidelines.

2.4.1.3 Phase - III: Detailed comparative analysis

Phase III: Detailed comparative analysis

Team Utilized:

 IBM members (Team 1 & 2) – Regional Objective: To find the best practices in the sand Controller of Mines and Deputy Controller of mining policies and practices Mines  Consultant’s members (Team 1 & 2) – Project Manager and Analysts

Key Outputs: 1. Comparison of the states and best practices

Post data collection and detailed analysis of the various parameters of sand mining policies and processes of individual states, it was extremely important to have a comparison among the states on the respective parameters to understand the best practices among all the practices being followed by the states. Hence, in this phase detailed comparative analysis has been carried out focusing on 3 major aspects:

 Comparison of pros and cons of every mechanism being followed by the states  Any other best practices and its pros & cons This analysis is extremely important for the formulation of the sand mining guidelines.

Figure 2-8 Approach of the analysis

Comparison of each state in terms of process folllowed

Impact and pros & cons of the practices

Any other best practices and its pros & cons

Discussion and consultation with the Ministry for best practices

The analysis was carried out using both the qualitative as well as quantitative approach based on careful analyses of the information gathered through documents and the responses from the stakeholders’ interactions. It also included identification of performance gaps and improvement opportunities in each states. The major areas that are used for the comparison within the states are:

Figure 2- 9 Areas covered for comparison within states

Regulatory and Legal Business model IT infrastructure analysis

• Rules, regulations and • Allocation model • Allocation policies • Operational control • Ordering • Royalty and taxation • Sale rights • Monitoring • Identification • Type of concessions • Delivery • Clearances and approvals

Some of the details of the tasks carried out in this phase are: . The team compared the comparison of the rules and regulation followed by the different states and its impact on the prices, demand and supply situation of the state.

. The team compared the entire value chain of sand mining operation from identification of sand reaches to sale of sand followed in the different states. Each process in the different states was analyzed and the pros and cons from the perspective of the government was captured. The team also analyzed the data collected through different stakeholders involved in the value chain of sand mining and benchmarked the practices based on the input from the stakeholders and our analysis. The information collected was compiled into standard templates and matrices that demonstrates underlying driver of performance.

. The team identified the technological requirements for different stages of sand mining for each of the state including new generation technologies for transportation and tracking illegal sand mining. The level of transparency brought in the complete process of sand mining in the states because of the usage of technology was also evaluated. After finalization of areas where technical up-gradation is required, different business models for technical emblements were analyzed and the pros and cons were also captured to help the government in selection of the appropriate business model that can best fit as per the requirements and functioning of the states.

. Various pricing mechanism followed by different states and the royalty structure of different states were analyzed along with its pros and cons from the perspective of the government. The team carried out in-depth research on the different strategies and mechanisms followed by the states and analyzed the factors which hinder and encourage, the revenue of the government. Based on this study, the mechanism which can best fit as per the requirements and functioning of the states was highlighted.

Based on this analysis, the best practices followed in the different processes and impact that these best practices could bring in other states were also analyzed.

2.4.1.4 Phase - IV: Recommendations

Phase IV: Recommendations

Team Utilized:

Objective: To make final recommendations for the  IBM members (Team 1 & 2) – Regional policies and practices to be followed by the states Controller of Mines and Deputy Controller of along with proposing different alternates of river Mines sand and methods for demand estimation  Consultant’s members (Team 1 & 2) – Project Manager and Analysts

Key Outputs: 1. Comprehensive Sand Mining Guidelines

Based on all the previous analyses, specific recommendations to act upon in order to control pilferages, carry out in mining activities in sustainable and environment friendly way, ensure availability of sand, make best utilization of available technologies etc. are made. A broad road-map for realistic targets to improve the present condition is also prepared. Along with the above in this phase, the alternate options of river sand are analyzed and method to estimate the demand of sand in the state is proposed.

Figure 2-10 Pictorial representation of the process to be followed

Practices in state A

Pratices Practices in State B Practices in State in State B A

Options Other Practices in state C options

Other practice based on analysis Best practices

Guidelines for sand mining

The recommendations are made in different aspects of the sand mining processes such as: For the improvement in the current policies and practices

 Process of identification of sand reaches

 Business model to be followed  Clearances and approvals  Allocation of reaches  Operations and Monitoring  Transportation of sand  Sale of sand  Others For the alternate policy options

 M-sand  Processing and segregating overburden from coal mines  Processing of construction and demolition waste  Import from other countries Further, three methodologies have been proposed to estimate the quantity of sand consumed in a state in this module.

 Based on the cement consumption of the states  Based on the RBI data for construction index  Based on the sand requirements of the government projects The recommendations are made based on the analyses of the pros and cons individual mechanisms being followed by the states in every aspect of the sand mining. The rationale has been mentioned for the each recommendation. The best suited option for every process is recommended in consultation with IBM. Based on the final recommendations, the resultant sand mining guidelines were prepared in consultation with the Ministry of mines.

3. State-wise policy and process analysis

This chapter presents the analysis of the policies, procedures and practices being followed by the respective states. This section presents an overview of the practices in sand mining in the states visited. The topics covered under the section are laws & rules applicable in the state, type of concessions granted for sand and period of concession, business model followed for grant of concession including methodology adopted by reserve price, royalty rates and units applicable etc., clearances and approvals taken, monitoring mechanism, sales rights, demand-supply situation in the state, landed cost for consumers and the position of DSR in the state, followed by a Summary Table depicting the entire value chain of sand mining in the states along with the usage of IT in the different processes in the value chain. The data facts mentioned in this section are based on the information gathered and based on the discussion with relevant stakeholders.

3.1 Andhra Pradesh

Regulatory provisions The minor mineral rules applicable in the state is the Andhra Pradesh Minor Mineral Concession Rules, 1966 and its amendments issued by Government Orders from time to time. The responsibility of the minor mineral “sand” is provided to the Department of Mines & Geology. For sand there is separate policy which was framed in 2015 with name “New Sand Mining Policy”. Later on this was changed in 2016 to “Free Sand Policy”. Business Model

In the free sand policy, the government notifies the sand reaches from where anyone can take sand free of cost (i.e. without paying any royalty or other taxes but only payment of extraction cost which has been fixed by the Government for each district). There are also various Self Help Groups (SHGs) working to load sand on the transporting vehicles at the notified reaches. Department has issued instruction to notify small reaches to facilitate public to get the sand. The time period for notified reaches is one year or till exhaustion of lease, whichever is earlier. Also department has fixed maximum landed rates in each district including transportation cost for consumers.

Types of sand Minimum Maximum Limit for holding Time period concession Area Area maximum area in the state

Notified Sand No No Till exhaustion of sand or one year period, No restriction reaches restriction restriction whichever is earlier

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Notified or Notified sand Notification for controlled Pricing reaches for extraction to SHGs Not Not Applicable 10 Model extraction by Public or Public on their Applicable or by SHGs own

The assistant director, mines and geology, has the responsibility to prepare Mine Plan for feasible sand bearing areas duly dividing the sand reaches having an extent of above 5 Ha into small reaches. Further the department has the responsibility to get the environmental clearance from the appropriate body based on the size of the notified area. Monitoring

For monitoring, the department has deployed technical assistants (TAs) on all the active reaches who provide real time data from all the reaches with photographs of all the sand carrying vehicles. The technical assistant notes down the details of the driver of the sand carrying vehicle and the sand consumer. Further these details are getting uploaded to the system on real time basis and software tracks the movement of GPS based vehicle. Software issues alerts in case of discrepancies between the consumer address and destination. Sales

The state has already developed a mobile application for sand which is expected to be operational within a month or two (i.e. by Feb 2018), and once it gets fully functional, all the bookings for sand in the state will be done through the app. All the sand carrying vehicles in the state are registered with the department and the state has also released a G.O. to mandate the installation of GPS in all sand carrying vehicles by February 2018. The government has constituted a 5 member, district committee in all the districts which includes the Superintendent of Police, District Transport Commissioner, Executive Engineer of Irrigation department and ADMG, under the chairmanship of District collector. The committee notifies the price for sand in the districts of the state including the transportation, loading/unloading and ramp maintenance fee. There is 24 hours operational call center which gives a call to all the consumer to enquire whether the amount that is charged for sand is within the government’s notified limit. Consequently the landed price of sand in the state is under control. DSR Status

District Survey Report is not being prepared in Andhra Pradesh. State prepare their own reports which are similar to DSR reports as per the department. Demand-Supply Assessment

No proper demand-supply assessment has been carried out by the state of Andhra Pradesh. However, since the state is sand deficit, it ensures through proper monitoring mechanism that no sand from Andhra Pradesh is transported across the border to other states. However, there is no restriction on import of sand from other states to Andhra Pradesh. Further to take care of sand deficit, Andhra Pradesh has given industry status to M-sand producing units in the state and has granted certain incentives for production of M-sand to encourage the manufacturers of M- sand. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 9 Summary of sand mining policy and process analysis of Andhra Pradesh

IT Activity Responsibility Sub-Activity Timelines Infrastructure Usage  Joint inspection to fix the boundaries. Identification of District Level  Assess the sand in terms of quantity 1 month Offline sand reaches Committee  Study the environmental aspects Clearances &  Preparation of feasibility report. Approvals District Level  Obtain clearance from Ground Water 2-3 months Offline (Mining Plan, Committee Department as per WALT Act & Rules. Environment

IT Activity Responsibility Sub-Activity Timelines Infrastructure Usage clearance,  Clearance from River Conservator in Consent to case of underwater extraction operate)  Responsibility of preparation of mining plan, mine closure plan, Environment study(EIA/EMP)  Submission of approved mining and environmental study (EIA/EMP) to authority for issue of environmental clearance. Department of  The department notifies the sand Notification of mines & geology, reaches for public after getting all the 1 month Online sand reaches Andhra Pradesh required clearances.  After DGM notifies the area, anyone can excavate and load sand from the (Operations) notified reaches. Continuous SHGs/  At some of the reaches, Self Help Offline operation Operation and Consumers Groups are working to load sand on the Monitoring vehicles in lieu of the loading charges to be borne by the consumer. (Monitoring)  Overall monitoring responsibility lies Continuous Monitoring Offline & Online with Monitoring Committee. operation Committee  Delivering the sand to the consumer after paying loading charges. Continuous Transporters Offline  Collecting money from the consumer operation after delivery of sand.  Getting all the transportation vehicles Transportation registered. Department of  Issuance of “Weighment Slip” by the Continuous Mines & geology, department. Online operation Andhra Pradesh  DMG has released G.O. to mandate installation of GPS in all sand carrying vehicles. Department of  Ordering is happening offline only and Continuous Sales Mines & geology, providing platform for booking of sand Offline operation Andhra Pradesh (being developed).

3.2 Assam

Regulatory Provisions The minor mineral rules applicable in the state is Assam Minor Mineral Concession Rules, 2013 and the responsibility lies with the District Forest Officers (DFOs) under the Department of Environment and Forest of the state. The types of the concessions which are allotted in the state are mining lease (ML), mining contracts (MC) and mining permit (MP). State is changing their rules and post amendments of the rules, Directorate of Geology & Mining shall be handling responsibility of the minor mineral as well.

Business Model

The allocation of concessions is through offline tender route with a reserve price which is equal to the royalty rate of the sand (Rs 140/cum from 2015 onwards). The highest amount discovered in the tender document becomes the premium to be paid by the bidders. From 2018 onwards, the state is going to adopt e-auction model for grant of concessions post amendments of the rules. Mining lease is granted for a period of 10 to 20 years. Further there is no restriction on the maximum area for allotment or holding of maximum area by any individual as per the state Rules. Mining Contracts is granted for a period of 7 to 10 years and there is no restriction on the minimum area or the maximum area for allotment or neither there is any limit of holding of maximum area by any individual. Mining permits are granted for a period of less than two years and for area of less than 5 Ha (maximum limit). However there is no minimum limit for the area to be granted.

Minimum Area Maximum Area Limit for holding Types of sand maximum area in Time period concession the state

Mining Lease, Mining Lease: 10-20 years Mining Mining Contracts, 1 Ha No restriction No restriction contract 7-10 Years Mining Permit: 2 Mining Permits Years

Business Model Sub-model Process followed Separate Production Revenue FY17 accounting for FY17 royalty (Yes/ No) (Rs. Crores) (MTPA)

Market Model Competitive Offline tender NA 5.6 30-35* Bidding

*Rough estimate as calculated from data provided for all the leases, need to be validated by the department The Lessee has the responsibility to prepare the mine plan and get the environment clearance from the relevant body depending on the size of the sand block, and consent for operation and consent for approval from Assam Pollution Control Board. Sales

The sale price of sand at pit head is Rs 250-300 per cubic metre and the price in Guwahati at a distance of around 70-80Km from sand reach is around Rs 800 to 900 per cubic metre. However, during monsoon period sand price in Guwahati shoots up-to Rs 1200 to1500 per cubic metre. There is no significant use of technology in the entire value chain of sand mining in the state and even the monitoring is done by offline means. DSR Status

The State of Assam has still not started preparation of District Survey Report (DSR). There are total 33 districts and sand mining is done in all the districts. Demand Supply assessment

No specific details are available with the state regarding the state’s sand demand, consumption, replenishment etc. Since export of sand is also allowed to other states it is really difficult to assess the demand of the sand. However rough estimate of the production of sand last years is around 3 million cubic meters. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 10 Summary of sand mining policy and process analysis of Assam

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage District Forest  Identification of sand-bearing area and Officers of the preparation of Initial Report Identification of Environment &  Fixing boundary and assessment of 3-4 months Offline sand reaches Forest quantity of sand in reaches in each Department, block. Assam 1 months + 1 Environment &  Conduct of tender process and months for Allotment of Forest selection of successful bidder issue of final Offline sand reaches Department,  Issuance of LoI to the successful bidder acceptance Assam letter/ LoI 1-2 month (if  Responsibility of preparation of mining area is plan, mine closure plan, environment less than 5 plans (thorough RQP) Ha.)  Getting approved mine plan, mine closure plan from DMG and 6-12 months Clearances & Lessee Offline environment study (EIA/EMP). (If area is < 25 Approvals  Submission of approved mining and Ha.) (Mining Plan, environmental Study (EIA/EMP) to Environment authority for issue of environmental 12-36 months clearance, clearance. (If area is 25 Consent to Ha.) operate)  Application for Consent for Establishment (CFE) and Consent for Operation (CFO) to District Pollution 1 month Lessee Offline Control Board.  Other relevant clearances and approvals  Mining and loading operation is conducted by the Lessee. Operations  Responsible for procurement of Continuous Offline (Lessee) machinery for sand extraction, operation Operation and transport, and loading/unloading. Monitoring  Capital and operating expenses Environment & Forest  Overall monitoring responsibility lies Continuous Offline Department, with environment & forest department operation Assam

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Selection of transporters Continuous Lessee  Fixing of transportation charges based Offline operation Transportation on travel distance.  Issuance of “Permit” by the contractor/ Continuous Lessee Offline permit holder operation  Getting orders through different sources (Agents/ direct consumers Continuous Sales Lessee etc.) Offline operation  Delivering the sane to respective customers

3.3 Chhattisgarh

Regulatory Provisions

The state of Chhattisgarh amended the Minor Mineral rules in the year 2015 and the current rule applicable in the state is Chhattisgarh Minor Mineral Rules 2015. The responsibility of the minor mineral “sand” is handled by “Directorate of Geology & Mining, Chhattisgarh”, and as per article 3 (vi) of the CMMR 2015, sand mining in the state is governed by the Chhattisgarh Minor Mineral Sand Excavation and Trade Regulation Order 2006. For sand mines the Quarry permit is granted in the state and the time period for sand concessions is not defined, the extraction is permitted for as long as the environment clearance permits. There is also no restriction on the size of the area that can be granted for sand concessions in the state. Business Model

The allocation of the sand reaches in Chhattisgarh is on application by the gram panchayat to the District Collector and the royalty applicable is Rs 20 per m3. Further the royalty collected in the state is retained by the panchayat department for development expenses.

Minimum Maximum Area Limit for holding Types of sand Area maximum area in the Time period concession state

Quarry Permit 1 Ha No restriction 50 Ha As long as EC permits

Business Model Sub-model Process Separate accounting for Production Revenue FY17 followed royalty (Yes/ No) FY17 (Rs. Crores) (MTPA)

Notified or Nomination Allocation to controlled Panchayat Yes 9.67 10.6 Pricing Model

The Department of Mines and Geology gets the environment clearance and prepares the mine plan on behalf of the panchayat, which reduces the time for getting the clearances. The operations control and sales right, for sand is with the gram panchayat in the state. Sales

There is no charge for sand applicable in the state apart from royalty, and anyone can go to reach with a vehicle and load sand at his own expense after paying the royalty amount the panchayat. The state has sufficient sand available and the price which the consumers have to pay for sand varies from Rs 250 to 700 per cubic metre (i.e. around Rs 460 /tonne to Rs 1300/tonne for a bulk density of 1.89 g/cm3) depending on the distance of the consumption point from the reach. There is limited use of technology in any of the sand mining processes in the state but for monitoring purpose Geo-tagging of the sand reaches is done which makes physical monitoring of the sand reaches easier. Demand Supply assessment

No demand-supply assessment for sand has been done by the state of Chhattisgarh, but the state has sufficient sand to meet the sand demand. Further there is no restriction on transport of sand out the state boundary, however, after a recent issue of transportation of sand to other state using wagon caught attention, the state Secretary has issued a notification to discourage transport of sand to other states. DSR Status

District survey Report is prepared in all the 27 districts of Chhattisgarh. However, the main purpose of the DSR is to estimate the resource in the state, which is not covered in the DSR prepared in the state. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table.

Table 11 Summary of sand mining policy and process analysis of Chhattisgarh

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Identification of sand-bearing area and preparation of Site Appraisal Report Directorate of  Fixing boundary and assessment of Identification of Geology & Usually takes quantity of sand in reaches in each Offline sand reaches Mining, 1 month district. Chhattisgarh  Decision on the feasibility of sand mining in the identified areas. Not defined, but after Directorate of  On Nomination Basis application, Allotment of Geology &  Notification of the sand reach in the the collector Offline sand reaches Mining, name of the Gram Panchayat immediately Chhattisgarh notifies the area  Responsibility of preparation of mining Clearances & Depending Directorate of plan, mine closure plan, environment Approvals upon the area Geology & Study (EIA/EMP) (Mining Plan, of the Offline Mining,  Getting mine plans, mine closure plan Environment concession Chhattisgarh and environment Study (EIA/EMP), clearance) approved

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Submission of approved mining and environmental plans to authority for issue of environmental clearance.  Mining and loading operation is conducted by the Panchayat or the end user himself. Operation (Gram Continuous  Responsible for procurement of Offline Panchayat) operation Operation and machinery for sand extraction, and Monitoring loading/unloading in case use of machines is permitted as per the EC. Monitoring  Overall monitoring responsibility lies Continuous (District with District Collector, who deputes the Offline operation Collector) team of task force for the purpose.  Hiring of transporting vehicle. Customer/ End  Hiring of laborers for loading/unloading Continuous Transportation Offline user or payment to villagers working at the operation reach for the same.  Issuance of Transport Permit to Continuous Sales Gram Panchayat transporting vehicle on payment of Offline operation royalty.

3.4 Gujarat

Regulatory Provisions The minor mineral rules applicable in the state of Gujarat is Gujarat Minor Mineral Concession Rules, 2017 and the responsibility of the minor mineral “sand” is provided to the Commissioner of Geology & Mining (CGM), under Industries and Mines Department. Sand is part of Part A of the Schedule III of the Rules. Business Model

From 2017 onwards, the allocation of the sand reaches in the state is through a transparent process of inviting competitive bid/ open auction. The business model used is “Tender cum forward auction model” since May 2017 with a reserve price which is 20% of value of the mineral dispatched. The bidders quote the premium to be paid in terms of % over and above the 20%. The value of mineral of sand published by the state government is Rs 240/ tonne for the state hence reserve price is Rs 48/tonne. The period of the concession granted for sand in the state is 5 years. The operation and sale of sand in the state is done by the Lessee with no regulation from the state government. The concession granted for sand in the state is quarry lease for which the minimum area that can be granted is 1 Ha and maximum area to be granted is 50 Ha.

Minimum Area Maximum Area Limit for holding Types of sand maximum area by one Time period concession individual in the state

Quarry Lease, Quarry 50 Ha (Schedule III Part 50 Ha for QL Permit and Quarry 1 Ha A /500Ha (Schedule III 5 Years 0.2 Ha for QParwana Parwana Part B)

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Market Model Competitive Bidding Online tender cum Yes 31.2 115.1 forward auction

The Lessee has the responsibility of preparing the mine plan and taking the environment clearance from the relevant body depending on the size of the block and Consent to Operate from the pollution control board. Most of the sand is transported through tractor and trucks and the state has made GPS installation in all sand carrying vehicles mandatory. Sales

Sale rights of the sand are with Lessee through offline mode (direct order with Lessee, agents etc.). There is no provision of online purchase of sand for the consumers. However, there is restriction for the export of sand to other states and from others states to Gujarat. The sand prices vary in the state from Rs 80/tonne to Rs 800/ tonne depending upon the districts and nearby infrastructure projects happening in the state. DSR Status

The State of Gujarat in in the process of preparation and finalization of DSR’s for all the sand related districts (32 Nos. out of total 33 districts) for which data are being collected by the district level officer. DSR is already ready and approved for Baroda District and rest of the districts is under preparation or approval stage. Demand Supply assessment

No specific data is available with the state regarding the state’s sand demand, consumption, replenishment etc. However, a rough estimate given by department shows demand of 70 MTPA is the demand in the state for ordinary sand and 2016 data shows the production of around 58 MT. Hence demand-supply deficit is around 12 MTPA which is roughly 18% of the demand. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 12 Summary of sand mining policy and process analysis of Gujarat

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Identification of sand-bearing area CGM, Industries and preparation of Geological report Identification of sand and Mines (GR) reaches/ 3-4 months Offline Department,  Fixing boundary and assessment of Mines/concessions Gujarat quantity of sand in reaches in each block. CGM, Industries  Selection of IT Platform/vendor for 1 Months + 1 Allotment of sand and Mines conduct of auction months for Online reaches Department,  Issue of NIT/Bid Documents issue of final Gujarat

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Conduct of auction and selection of acceptance successful bidder letter/ LoI  Issuance of provisional acceptance letter and final acceptance letter to the successful bidder 3 Months for mining plan,  Responsibility of preparation of mine closure mining plan, mine closure plan, plan environment Study (EIA/EMP) approval  Getting approved mine plan, mine

closure plan and environment Study 6-12 Months Lessee (EIA/EMP) Offline Clearances & (If area is <  Submission of approved mining and Approvals 25 Ha.) environmental Study (EIA/EMP) to

(Mining Plan, authority for issue of environmental Environment clearance. 12-36 clearance, Consent Months (If to operate) area is 25 Ha.)  Application for Consent for Establishment (CFE) and Consent for Operation (CFO) to District 1 Month Lessee Offline Pollution Control Board.  Other relevant clearances and approvals

 Mining and loading operation is Continuous conducted by the Lessee. operation as per the time Operations  Responsible for procurement of period for Offline (Lessee) machinery for sand extraction, which Operation and transport, and loading/unloading. concession Monitoring  Capital and operating expenses is allotted. CGM, Industries and Mines  Overall monitoring responsibility lies Continuous Offline & Online Department, with District Monitoring Committee. operation Gujarat  Selection of transporters Continuous Lessee  Fixing of transportation charges Offline operation based on travel distance. Transportation CGM, Industries and Mines  Issuance of “royalty Pass and Continuous Online Department, permit ” by the department operation Gujarat  Getting orders through different sources (Agents/ direct consumers Continuous Sales Lessee etc.) Offline operation  Delivering the sane to respective customers

3.5 Haryana

Regulatory Provision The minor mineral rules applicable in the state of Haryana is Haryana Minor Mineral Concession, Stocking, Transportation of Minerals and Prevention of Illegal Mining Rules, 2012 and the responsibility of the minor mineral “sand” is provided to the Mines and Geology Department, Haryana. Business Model

The allocation of the sand reaches in the state is through forward e-auction, with a reserve price which is a lump sum amount based on the area of the block and based on the previous auctioned value of the same block/area. The rate of royalty in the state is Rs 40/ MT but there is no provision of royalty on sand in case of mining contract as the highest bid offered in the auction becomes the annual contract money and the contractor is liable to pay monthly installment of that annual highest bid. The contract money expires after every three years period, and is enhanced by 25% of the previous contract money after the expiry. The time period of the contract granted in the state is 7 to 10 years. There is no pre-defined annual limit of extraction of sand from sand blocks in the contracts which are auctioned. The limit for extraction of sand is defined in the mining plan/ environment clearance and the responsibility of preparing the mine plan and taking the relevant clearances and approvals lies with the contractor to whom sand mines are allocated/auctioned.

Minimum Area Maximum Area Limit for holding maximum area in the Types of sand concession Time period state

Mining Lease, Mining Contracts, Quarrying Mineral disposal 1 Ha Not defined 1000 Ha 7-10 Years permit

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Market Model Competitive Bidding Online Forward No 19.2* 265.9* auction

*Production and revenue includes for sand and BGS.

The operation and sale of sand in the state is done by the contractor with no regulation from the state government. There is no restriction on the maximum size of the block that can be allocated through e-auction. Other than limited use of CCTVs and auction of the blocks, IT infrastructure has no major role in complete operations and monitoring part of Haryana. The state is in process of developing IT system for monitoring of its mines and implementing e-Ravana system in lines of the notification of MoEFCC, GoI. Further, to check cases of illegal mining the state has given its consent to Government of India to implement MSS for minor minerals also for which the state has already provided the details of each mine as well as the cadastral maps/ khasra maps duly demarcated to the Bhaskaracharya Institute of Space Application and Geo Informatics (BISAG) at Gandhinagar.

Sales

There are no notified rates for the transportation of the sand in the state of Haryana and transportation is completely owned by private transporters and managed by the contractors only. Since sale and delivery rights are with the contractors, they are free to use own transporters for delivery of the sand. The price of sand in the state is around Rs 500 to 550 per metric tonne at pit head and is sold at Rs 600 per tonne in Karnal district which is at a distance of around 25 to 30 kms from mining area, including the transportation charges. In Panchkula district the rates of sand are available at 20-22/ft3 (i.e. around 600-650/ tonne) at a distance of around 20-25km from sand mines. DSR Status

The State of Haryana is in the process of preparation and finalization of DSR’s for which data are being collected by the district level officer. District Survey Report is getting prepared for the sand bearing districts i.e. 15 out of total 23 districts. DSR report is yet to be approved from the authority. Once all the reports are ready and approved by the authority total resource assessment of the state can be done. There is no specific data available with the state regarding the state’s sand demand, consumption. However, the state has surplus sand and also caters to sand requirements of Delhi to some extent. There is no restriction for the export of sand to other states and from others states to Haryana. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 13 Summary of sand mining policy and process analysis of Haryana

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Identification of sand-bearing area and preparation of Initial feasibility report. Mines and  Fixing boundary and assessment of Identification of Geology quantity of sand in reaches in each 2-3 months Offline sand reaches Department, district. Haryana  Decision on the feasibility of sand mining in the identified areas.  Forest area demarcation and approval  Selection of IT Platform/vendor for conduct of auction Mines and 1-2 Months  Issue of NIT/Bid Documents Allotment of Geology +3 months  Conduct of auction and selection of Online sand reaches Department, for issue of successful bidder Haryana Lease  Issuance of Letter of Intent to the successful bidder  Responsibility of preparation of mining plan (by RQP), mine closure plan, 2-3 months Clearances & environment Study (EIA/EMP) for mining Approvals  Getting approved mine plan, mine plan (Mining Plan, Contractor closure plan and environment plans approval Offline Environment  Submission of approved mining and clearance, environmental Study (EIA/EMP) to CFE/CFO) authority for issue of environmental clearance.

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Application for Consent for 6-12 Months Establishment (CFE) and Consent for (If area is < Operation (CFO) to District Pollution 25 Ha.) Control Board.  Other relevant clearances and 12-36 approvals Months (If area is 25 Ha.)  Mining and loading operation is conducted by the contractor. Operations  Responsible for procurement of Continuous Offline (Contractor) machinery for sand extraction, operation transport, and loading/unloading. Operation and  Capital and operating expenses Monitoring Monitoring (Mines and  Overall monitoring responsibility lies Continuous Geology Offline with District Monitoring Committee. operation Department, Haryana)  Selection of transporters Continuous Transportation Contractor  Issuance of “Mineral Transit Pass” by Offline operation the department  Getting orders through different sources (Agents/ direct consumers etc.) Continuous Sales Contractor Offline  Delivering the sane to respective operation customers

3.6 Karnataka

Regulatory Provisions Karnataka has done major amended its Karnataka Minor Mineral Concession (Amendment) Rules, 1994 in 2016 and has added a separate chapter IV-B detailing the permission for quarrying of ordinary sand in river bed, patta land, removal of sand bars in Coastal Regulation Zone areas of coastal districts and special provisions for production of M-sand as well as for transportation of sand and M-sand. The concessions granted in Karnataka is called Quarry Lease. There is restriction on the maximum area that can be granted for sand concessions in the state i.e. 50 acres (20 Ha.) for mineral based industry and 10 acres (4 Ha.) for others but the minimum area that can be granted is 5 Ha. The time period for sand concessions is less than 5 years. Business Model

The responsibility of the minor mineral “sand” is assigned to the Department of Mines & Geology. The model used in the state of Karnataka after amended rules is tender cum forward auction method. The base price is fixed at 20% of the royalty applicable (Current royalty in the state is Rs 60/ m3) and 2 stage auction method is followed to arrive at the final price. Prior to 2016, sand mining was carried out by Public Works Department in the state from 2011 onwards.

Further, temporary permits is granted to local communities to remove sand from the coastal area on application basis. The permit is renewed on yearly basis and the Environmental Official at the District level is responsible to monitor the removal of sand. The State Government studies the accumulation of sand bars and its removal with the help of Satellite Imageries, GPS etc. Apart from this, the State Government may permit sand quarrying in specified patta lands with such terms and conditions as may be specified by the State Government, on recommendation of the District Committee regarding the quality of sand and its suitability for construction purposes, with adequate justification. The District Committee has the power to fix the maximum rate at which the holders of license can sell sand at the loading point and indicate this in the license condition, and can also allocate up-to 25% of sand for low income housing or government work from holders of license.

Minimum Area Maximum Area Limit for holding maximum area Types of sand in the state Time

concession period

Quarry Lease and 20 Ha (Mineral Based 20 Ha (Mineral Based Industry)/ 4 Temporary Permit (for 0.4 Ha Industry)/ 4 Ha for < 5 Years Ha for others local communities) others

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Market Model Competitive Bidding Online tender cum 4.0 25.2 Yes forward auction

The successful bidder has the responsibility to submit the approved quarry plan within two months of issuance of letter of intent by the concerned competent authority, and to get the Environment Clearance from the granting authority (DEIAA/SEIAA/MoEFCC) before commencement of quarrying operations. The operation and sale of sand in the state is taken care of by the Lessee with no regulation from the state government. However, the District Collector may fix the maximum sale price of sand for each district in the Tender Document itself. Karnataka has district and taluk, sand monitoring committees that are responsible for identification and monitoring of sand in the state. The district committee is empowered to establish check post wherever necessary to regulate transportation of sand and make suitable arrangements for patrolling to monitor illegal transportation including river patrol wherever necessary. And the taluk committee is empowered to monitor sand excavation in all concession areas and to enforce laws and regulate illegal quarrying, storage and transportation of sand. There are certain reservations for sand mining in the state of Karnataka such as: 1. District Committee may by notification in the official Gazette, reserve sand blocks for low income housing and or for government works or for sand extraction by Government agencies or Boards or Corporations owned by the Central Government or State Government. The rest of the blocks shall be notified for grant by way of tender cum auctions.

2. District Committee shall reserve the sand blocks identified for grant through tender cum auction, by way of lottery to the following categories as per percentage mentioned against each category; namely - 24% reservation for persons or company or firms or societies belonging to Scheduled Caste or Scheduled Tribes and - 2% for person with physical disability, - Remaining 74% for others. Sales

The Lessee have the responsibility of sale of sand with limited regulation from the state government. Consequently, the price of sand is very high in the state, especially in cities which are far away from the sand excavation areas. In Bangalore, consumers have to shell out Rs 1 lack for a 30 tonne truck of sand (i.e. Rs 3500/tonne). The state is using technology in allocation of sand reaches as well as in delivery, and all the sand transporting vehicles are GPS enabled. The minor mineral rule applicable in the state mandates the lessee to install the office, computer facility, electricity supply, CCTV camera, weigh bridge, security at dump yard or stock yard of the sand. DSR status

As per MoEFCC notification No.So:141, dated 15th January 2016, survey have been carried by DEIAA of the concerned districts and prepared the District Survey report for all the 30 districts. The expense for the preparation of DSR comes from the District Corpus Fund, after approval of the District or Taluk committee. Demand Supply assessment

As per the estimate, the production of river sand in the state is only 4 million tonnes out of the total demand of 30 million tonnes (based on DMG data), which has led to deficit of sand in the state and extremely high price. Majority of the deficit is met by the m-sand production in the state. Karnataka is the leading state in production of M-sand. The state has 164 M-sand production units that produce 20 million tonnes of M-sand per annum and 95% of the sand consumed in Bangalore is M-sand only. Further, to take care of sand scarcity, the state is in the process of bringing a policy through amendment in KMMCR for import of sand from other countries. The imported sand will be sold only in 50 and 100 kg sealed packets. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 14 Summary of sand mining policy and process analysis of Karnataka

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Identification of sand-bearing area and preparation of Site Appraisal Report Department of  Fixing boundary and assessment of Identification of Mines & quantity of sand in reaches in each 1-2 month Offline sand reaches Geology, district. Karnataka  Decision on the feasibility of sand mining in the identified areas.  Selection of IT Platform/vendor for 1 month + 1 Department of conduct of auction month for issue Allotment of Mines &  Issue of NIT/Bid Documents of final Online sand reaches Geology, acceptance Karnataka  Conduct of auction and selection of successful bidder letter

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Issuance of provisional acceptance letter and final acceptance letter to the successful bidder  Responsibility of preparation of mining plan (by RQP), mine closure plan, environment Study (EIA/EMP) Clearances &  Other relevant clearances and Approvals approvals (Mining Plan,  Getting approved mine plan, mine Depending Environment Lessee closure plan and environment Study upon the Offline clearance, (EIA/EMP) area Consent to  Submission of approved mining and operate) environmental Study (EIA/EMP) to authority for issue of environmental clearance.  Execution of lease deed.  Mining and loading operation is conducted by the Lessee. Operations  Responsible for procurement of Continuous Offline (Lessee) machinery for sand extraction, transport, operation Operation and and loading/unloading. Monitoring  Capital and operating expenses Department of Mines &  Overall monitoring responsibility lies Continuous Offline & online Geology, with District Monitoring Committee. operation Karnataka  Selection of transporters Continuous Lessee  Fixing of transportation charges based Offline operation on travel distance. Transportation Department of Mines &  Issuance of “Weighment Slip” by the Continuous Online Geology, department operation Karnataka  Getting orders through different sources (Agents/ direct consumers etc.) Continuous Sales Lessee Offline  Delivering the sane to respective operation customers

3.7 Madhya Pradesh

Regulatory Provisions The minor mineral rules applicable in the state is Madhya Pradesh Minor Mineral Rules, 1996 and the responsibility of the minor mineral “sand” is provided to the Directorate of Geology and Mining, Madhya Pradesh. Currently, sand mining in the state is governed by the Sand Mining Policy 2015, however the state is in the process of bringing a new sand policy by the name, New Sand Mining Policy 2017 in which the sand reaches will be allocated to the gram panchayats for sand excavation.

Business Model

Two business models are being used in the state. Currently, in 33 of the 51 districts, trade quarry is granted through forward e-auction, and in remaining 18 districts quarry lease is granted to Madhya Pradesh State Mining Corporation on nomination basis. Further MPSMC outsource the operations to contractors by reverse auction method. Apart from these, there is a provision of short term permit for government works. The Collector can grant permit for the duration of the project and the quantity of sand required for the project. The upset price is calculated by the base rate Rs 125 per cubic metre (Rs 100 towards royalty and Rs 25 towards Processing fee) of sand multiplied by the total quantity of Sand available in the lease. The lease is allotted to the H1 bidder quoting the highest bid above the calculated Base price. However, from 2018 onwards the allocation of sand in the 33 districts where earlier auction method was used, the sand bearing areas will be allocated to Gram Panchayats on nomination basis. There is no restriction on the upper limit of size of concessions that can be granted. However, the minimum area that can be granted is 1 Ha. The time period for the blocks allotted through e-auction is 5 years and for the leases granted to MPSMC is 2 years.

Minimum Area Maximum Area Limit for holding Types of sand maximum area in the Time period concession state

Quarry Lease, Trade 1 Ha No restriction No restriction 5 Years Quarry

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

controlled Pricing Nomination Allocation to MPSMC Yes 49.14 240 Model (in 18 districts)

It is the responsibility of the H1 bidder to obtain the Environment clearance as per the norms of MoEFCC. In case of auction of Quarry leases of MPSMC the process of approval of mining plan and Environment clearance shall be done by officer in-charge of regional office with the assistance of H1 bidder. All cost of approvals shall be owned by the prospective contractor. For monitoring of sand mines, both state level and district level, team of task force is constituted under the chairmanship of district collector. The team comprises of officers from Revenue department, Transport department, Forest department, Mining Department and Police department, under the chairmanship of district collector. Representative from Environment department is also called as there are several issues related to environment. The district officer can visit the excavation site for monitoring. While during transportation, anyone of the following, Mining Inspector, Mining Officer or police can check the vehicles transporting sand for the e-permit. Sales

The government has no control over the transportation rates and sale price of sand in the state. Around 90% of the illegal mining cases closed in the state is related to illegal transportation of sand.

For transportation of sand in the state, every vehicle has to be registered on the e-khanij portal. E-permit is issued in the name of a vehicle after payment of the royalty figure on the portal. The government has notified to install GPS in all sand carrying vehicles in the state in next 6 months. After the said period, no vehicle without GPS will be allowed at the sand reaches. DSR Status

District survey Report is prepared in all the 51 districts of Madhya Pradesh. DSR is prepared as per the notification of the MoEFCC, but the Sustainable Sand Mining Management Guidelines 2016 released by MoEFCC which prescribes the method for the different processes is not followed. Demand Supply assessment

Madhya Pradesh has not carried out any demand-supply assessment for sand in the state. As per the government estimate, the demand for sand in the year 2016-2017 was 26 million m3. However the production figure reported through sale of sand on the e-khanij portal was short of this by a huge margin. The state does not have any restriction on inter-border transport of sand to and from, other states. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT ‘infrastructure is mentioned in the table below.

Table 15 Summary of sand mining policy and process analysis of Madhya Pradesh

IT Activity Responsibility Sub-Activity Timelines Infrastructure Usage Directorate of Geology Identification of  Decision on the feasibility of sand and Mining, Madhya 1-2 months Offline sand reaches mining in the identified areas. Pradesh  Selection of IT Platform/vendor for conduct of auction  Issue of NIT/Bid Documents  Conduct of auction and selection of successful bidder in 33 districts through e-auction, and grant of Directorate of Geology Trade Quarry License in remaining and Mining, Madhya Online Allotment of 18 districts to MPSMC on Pradesh sand reaches nomination basis.  Issuance of Letter of Intent to the successful bidder  Allotment of the sand bearing area on submission of statutory clearances  Execution of contract agreement as Lessee or MPSMC 1/2 month Offline per Indian Stamp act 1899  Approved mining plan from the Clearances & Deputy Director of Mines & Geology Approvals of the Region concerned. (Mining Plan,  Environmental Clearance (EC) from Environment Lessee or MPSMC 2 months Offline State Environment Impact clearance, Assessment Authority. Consent to  Consent for Establishment operate) (CFE)/Consent for Operation (CFO)

IT Activity Responsibility Sub-Activity Timelines Infrastructure Usage from the State Pollution Control Board  Responsible for sand extraction, transport, and loading/unloading. Operations (Lessee/ Continuous  Responsible to bear the capital and Offline Contractor) operations operating expenses incurred in the process.  Overall monitoring responsibility lies with the task force team formed Operation and under the chairmanship of District Monitoring Collector. Some of the initiatives (Monitoring) State level taken by the team are: Continuous and District Level, task  Installation of Check post and Offline & online operation force team weigh bridges at check post on PPP model.  Mobile app for reporting of illegal mining/ transportation by making a video of the same.  Fixing of transportation charges based on travel distance. Continuous Transporters Offline  Delivering the sand to respective operation customers Transportation  Registration of transporting Directorate of Geology vehicles. Continuous and Mining, Madhya Online  Issuance of “E-transit pass” to the operation Pradesh contractor.  Getting orders through different Directorate of Geology sources (Agents/ direct consumers Continuous Sales and Mining, Madhya etc.) Offline operation Pradesh  Delivering the sane to respective customers

3.8 Maharashtra

Regulatory Provisions

The Minor Mineral rule applicable in the states of Maharashtra are Maharashtra Minor Mineral Extraction (Vidarbha Region) Rules, 1966; Bombay Minor Mineral Extraction Rules, 1955 for Western Maharashtra and The Rules regulating, working of Minor Minerals, 1954 for Marathwada region. The department responsible for minor minerals in the state is Directorate of Geology and Mining, Maharashtra. However the responsibility of sand is handled by the Revenue and Forest Department, Maharashtra. The state has separate set of rules for sand excavation called, Amended Sand Excavation Policy. The concessions of the sand mines allocated are called Quarry Lease. The time period for sand concessions is one year period ending 30th September. The size of concession in Maharashtra is not pre-defined, and every year after monsoon, in the month of October, assessment of the quantity of sand is done and based on the assessment the

size of concessions is decided. Further, there is no minimum or maximum restriction on the area that can be granted for sand concessions in the state, neither any restriction on the area holding by an individual. Business Model

Under the policy, the allocation of the river basin in the state is through e-tender i.e. forward premium method to be quoted by the bidder. For fixation of off-set price, if the auction of that particular sand block was done in previous year, then the highest bid offered in previous year is accepted. The highest bid divided by quantity available in previous year, multiplied by the quantity available this year is used as off-set price. If the auction was not done for the said block in the previous year, then details of the group auctioned in the previous year on the same river bed is accepted. And if the auction was not carried out in the previous year even in the same river bed, then the Collector shall propose the off-set price by giving triumph reasoning. Apart from river sand mining, creek mining is also done in the state where use of dredgers and suction pump is permitted. The blocks for creek mining is allocated through applications by issuing licenses to the person or society of such persons doing such business traditionally by hatpati or dubi means, and the sand extracted by creek mining is auctioned by the collector of the district. The sand extracted through creek mining is later auctioned by the district collector.

Minimum Area Maximum Area Limit for holding Types of sand maximum area in Time period concession the state

1 year, ending on Quarry Lease NA NA NA 30th September

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Market Model Competitive Bidding Online Forward NA NA No tender

Currently, royalty rate in the state is Rs 400 per brass but following the allocation method after 2016 rules, the royalty collected is inclusive of the auction premium. Before conduction the auction of river basin; approval of the Gramsabha in which the river basin lies is required and with atleast 50% voting in favour of the allocation of the block, opinion of Ground Water Survey and Development agency is taken to ascertain the sand stock available in the concerned sand group and whether the excavation of sand under water is necessary to avoid creation of flood condition, and in case of creek area, the opinion from Maharashtra Maritime Board has to be obtained by doing survey regarding the approximate sand stock available in concern sand group, how much deep the excavation has to be done and whether the use of technical equipment for excavation shall be permitted or not. And after the auction process, the auction holder has the responsibility to get the environmental clearance from the concerned body. Mining plan is not followed in the state, as a result, NGT has banned sand mining in Gondia district.

The District Collectors in the state are empowered to make decisions to curb illegal mining and some of the them use drones and CCTV cameras to monitor the reaches but overall monitoring in the state is done by offline means by a team of Tehsildars, Sub-divisional level officers, RTOs and Revenue department officers. Sales

The use of machinery has been struck down by the NGT in the state. The control of the operations as well as sales is with the Lessee of the sand reach. The prices of the sand are decontrolled and market dynamics determines the sand prices. Because of the lack of control of the government over the sale of sand in the state coupled with the forward auction method of allocation, the price of sand is quite high and the sale price (landed cost) of sand in Mumbai is around Rs 70,000 for a 30 tonne truck i.e. around Rs 2400/tonne. DSR Status

District Survey Report is being prepared in all the 36 districts and DSR for all 36 districts is already released. However, the replenishment study is not taken up in the DSR. Further the same reach is granted year after year for sand extraction without giving significant time to the reaches for replenishment which is leading to ecological imbalance. Demand Supply Assessment

Maharashtra has not conducted any demand-supply assessment for sand, but overall the state is sand deficit which has led to very high prices for sand in the state, and is considering a proposal for import of sand from other countries such as Malaysia and Philippines. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 16 Summary of sand mining policy and process analysis of Maharashtra

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Identification of sand-bearing area, Identification of sand fixing the boundary and reaches/ District Collector 1 month Offline assessment of sand in the Mines/concessions reaches.  Selection of IT Platform/vendor for conduct of auction 1 Months +  Issue of NIT/Bid Documents 1 months  Conduct of tender and selection of Allotment of sand for issue of District Collector successful bidder Online reaches final  Issuance of provisional acceptance acceptance letter and final letter/ LoI acceptance letter to the successful bidder

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage

15 days for approval of  Other relevant clearances and gram sabha, approvals such as 10 days for District Collector recommendation of Gramsabha, ground  Offline Clearances & opinion of Ground Water Survey water survey Approvals and Development agency and (Mining Plan, development Environment agency clearance, Consent to operate)  Getting environment Study (EIA/EMP) approved Depending  Submission of approved upon the Lessee Offline environmental Study (EIA/EMP) to area of the authority for issue of concession. environmental clearance.

 Mining and loading operation is Continuous conducted by the Lessee. operation as per the time Operations  Responsible for procurement of period for Offline (Lessee) machinery for sand extraction, which transport, and loading/unloading. Operation and concession  Capital and operating expenses Monitoring is allotted.  Overall monitoring responsibility lies with District Collector and he is Continuous District Collector empowered to take whatever Offline & Online operation measures he feels necessary to monitor. Continuous Lessee  Selection of transporters Offline operation  Issuance of necessary Transportation permit/pass-book having bar- Continuous District Collector coding to the auction holder to the Offline operation extent of sand stock available for excavation  Getting orders through different sources (Agents/ direct consumers Continuous Sales Lessee etc.) Offline operation  Delivering the same to respective customers

3.9 Punjab

Regulatory Provisions The minor mineral rules applicable in the state of Punjab is Punjab Minor Mineral Rules, 2013 and the responsibility of the minor mineral “sand” is handled by the Mining Department which is under the Department of Industries and Commerce.

Business Model

The allocation of the sand concessions in the state is through forward e-auction method from 2017 onwards and the Reserve price applicable is Rs. 86 per tonne which includes royalty figure of Rs. 60 per ton, 10% as Environment Management Fund (Rs. 6 per tonne) and 1/3 of royalty as District Mineral Foundation Fund (Rs. 20 per tonne). The bidder quote for the lump sum amount to be paid annually by them to the government (inclusive of the royalty) and it increases by 10% every year. Further, the bidder also has to pay quarterly compensation to the land owners which is pre-defined in the tender document. The period of a mining contract is minimum of 02 years and maximum of 5 years and there are no restrictions on the area for grant of contracts as well as maximum area which a person can hold. Apart from mining contracts, the state also offers short term permit for sand which is granted to excavate a fixed quantity of sand and the permit is granted for a period less than one year. Short term permit is offered on application by the Director of the mining department and in case of more than one applicant proposes to extract the sand quantity, all parties submit their bid through sealed cover tender and the permit shall be given to the highest bidder. The maximum area for which short term permit is granted is 4 Ha.

Minimum Area Maximum Area Limit for holding Types of sand maximum area in the Time period concession state

Mining Lease, Grant For short term contracts of Contracts, Short No restriction 5 Sq km 2-5 Years – 4 Ha term Permit

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Market Model Competitive Bidding Online Forward e- No NA 43.8 auction

The state offers reservation to the local community and for the government works and in case sand is extracted by the land holder in case of private land. The department has the responsibility of preparation of mine plan and getting the environment clearance. Further the Lessee has the responsibility of only getting the Consent for Establishment and Consent for Operation from the Punjab Pollution Control Board. The mining is responsibility of the Lessee and department has no control over the complete operations of the mines, and transportation is completely owned by private transporters and managed by the Lessee with no notified rates for transportation of sand in the state. Since delivery and sand rights are with the Lessee, they are free to use own transporters for delivery of the sand. Consequently, the price of sand are quite volatile in Punjab. Sales

Monitoring mechanism for illegal mining is not very stringent in the state and no CCTV cameras or check posts are available for the monitoring of the illegal sand extraction. Department takes assistance of PESCO (Punjab Ex Servicemen Cooperative organization) for physical checking. The normal prices of sand in Bathinda Districts is around Rs 1100/m3 (Rs 500-600 /tonne) for washed (coarse) sand sourced from a distance of around 200+ Km (from Pathankot) and Rs 800/m3 (400-500/tonne) for fine sand (sourced from Zira/Firozpur) from distance of 100+ KM. However same increase during monsoon periods by 20-25%. DSR Status

The State of Punjab in in the process of preparation and finalization of DSR’s for all the sand related districts for which data are being collected by the district level officer. DSR is already ready and approved for Pathankot District and rest of the districts is under preparation or approval stage. Demand Supply Assessment

A rough estimate given by department shows demand of 16 MTPA in the state with a supply of around 11.5 MTPA. The net deficit is around 4.5 MTPA. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 17 Summary of sand mining policy and process analysis of Punjab

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Identification of sand-bearing area Mining and preparation of Site Appraisal Department, Report Identification of Department Of  Fixing boundary and assessment of 1 - 2 months Offline sand reaches Industries and quantity of sand in reaches in each Commerce, district. Punjab  Decision on the feasibility of sand mining in the identified areas.  Selection of IT Platform/vendor for Mining conduct of auction 1 Months + 1 Department,  Issue of NIT/Bid Documents months for Allotment of Department Of  Conduct of auction and selection of issue of final Online sand reaches Industries and successful bidder acceptance Commerce,  Issuance of provisional acceptance letter Punjab letter and final acceptance letter to the successful bidder  Responsibility of preparation of mining plan (by Qualified Person), 2-3 Months for Clearances & mine closure plan, environment mining plan Mining Approvals Study (EIA/EMP) preparation Department, (Mining Plan,  Getting approved mine plan, mine and approval Department Of Environment closure plan and environment Study Offline Industries and clearance, (EIA/EMP) 6-12 Months (If Commerce, Consent to area is < 25 Punjab  Submission of approved mining and operate) environmental Study (EIA/EMP) to Ha.) authority for issue of environmental clearance.

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage 12-36 Months (If area is >> 25 Ha.)  Transfer of Environment clearance (if any with the previous allottee)

 Application for Consent for 1-2 Month Establishment (CFE) and Consent Lessee Offline for Operation (CFO) to District Pollution Control Board. 1-2 Month  Other relevant clearances and approvals  Mining and loading operation is conducted by the Lessee. Operations  Responsible for procurement of Continuous Offline (Lessee) machinery for sand extraction, operation transport, and loading/unloading. Operation and  Capital and operating expenses Monitoring Mining Department,  Overall monitoring responsibility Department Of Continuous lies with District Monitoring Offline Industries and operation Committee. Commerce, Punjab  Selection of transporters Continuous Lessee  Fixing of transportation charges Offline operation based on travel distance. Mining Transportation Department, Department Of  Issuance of “Weighment Slip” by Continuous Online Industries and the department operation Commerce, Punjab  Getting orders through different sources (Agents/ direct consumers Continuous Sales Lessee etc.) Offline operation  Delivering the sane to respective customers

3.10 Rajasthan

Regulatory Provisions The Minor Mineral rules applicable in the state of Rajasthan is Rajasthan Minor Mineral Concession Rules, 2017 and the responsibility of the minor mineral “sand” is provided to the Department of Mines & Geology, Rajasthan. Business Model

Sand is allocated in the state though online tender cum auction and the concession applicable in state is mineral lease which is granted for 5 years. Reserve Price for the auction is 20% of the royalty payable on the river sand and currently the royalty for sand in the state is in the range of Rs 30 per tonne/ Rs 35 per tonne. There is no maximum limit of the area to be held by a particular individual/company/firm.

Minimum Area Maximum Area Limit for holding maximum Types of sand area in the state Time period concession

Mineral Lease, Quarry License, Short Term 5 Ha No restriction No restriction 5 Years Permit

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Market Model Competitive Bidding Online Tender cum No 56.8 235.9 forward auction

The mining is responsibility of the Lessee and department has no control over the operations of the mines. The government has no regulation over transportation and sale of sand as well. IT infrastructure has no significant role in the operations and monitoring part. Monitoring is done using check posts and physical checking of transportation material having valid permit or not. The regulations on illegal mining are also not very stringent in the state. Sales

On overall scenario, the sand price is quite volatile in the state due to supply constraints which increase the prices of sand. Sand is available at around Rs 300 to Rs 400 per tonne in cities like Udaipur which are around 40 to 50 km away from sand leases. Recently after SC ban in Nov 2017, the prices have shoot upto 1000-1200/tonne. DSR Status

The District Survey Report is ready for 23 districts out of 28 sand bearing districts. As per the DSRs production potential has been calculated which is around 40 MTPA from the 23 districts. Demand Supply Assessment

As per the demand estimate done by the state it shows demand of around 56 MTPA against the supply potential of 36 MTPA. Hence, there is huge deficit of around 20 MTPA. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 18 Summary of sand mining policy and process analysis of Rajasthan

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Identification of sand-bearing area and preparation of Mauka Report Department of Identification of  Fixing boundary and co-ordinates, Mines & Geology, 1-2 months Offline sand reaches area identification etc. Rajasthan  Decision on the feasibility of sand mining in the identified areas.  Selection of IT Platform/vendor for conduct of auction  Issue of NIT/Bid Documents 1 Months + 1 Department of Allotment of  Conduct of online tender cum months for Mines & Geology, Online sand reaches auction and selection of successful issue of Letter Rajasthan bidder of Intent  Issuance of Letter of Intent to the successful bidder

1 Month  Responsibility of preparation of mining plan (by RQP), mine closure plan, environment Study (EIA/EMP) Clearances &  Getting approved mine plan, mine 3 Months Approvals closure plan and environment Study (Mining Plan, (EIA/EMP) Environment Offline Lessee/ Lessee  Submission of approved mining and 6-12 Months clearance, environmental Study (EIA/EMP) to Consent to (If area is < 245 authority for issue of environmental operate) Ha.) clearance. 12-36 Months  Other relevant clearances and (If area is>>25 approvals Ha.)

 Mining and loading operation is conducted by the Lessee. Operations  Responsible for procurement of Continuous Offline (Lessee) machinery for sand extraction, operation Operation and transport, and loading/unloading. Monitoring  Capital and operating expenses Department of  Overall monitoring responsibility lies Continuous Mines & Geology, Offline with District Monitoring Committee. operation Rajasthan  Selection of transporters Continuous Lessee  Fixing of transportation charges Offline operation based on travel distance. Transportation Department of  Issuance of “Transit Pass” by the Continuous Mines & Geology, Online department operation Rajasthan  Getting orders through different Continuous Sales Lessee sources (Agents/ direct consumers Offline operation etc.)

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage  Delivering the sane to respective customers

3.11 Tamil Nadu

Regulatory Provisions The Minor Mineral rules applicable in the state of Tamil Nadu is Tamil Nadu Minor Mineral Concession Rules, 1959 and the state has introduced rule 38-A in the concession rules vide G.O.Ms. No. 95 dated 1st October 2003. The responsibility of the minor mineral “sand” is handled by the Department of Geology & Mining, Tamil Nadu. Business Model

The PWD is responsible for identification of sand bearing areas in the river stretches and they send a proposal to the District Collector for seeking quarrying permission. The collector conducts a joint inspection of the proposed area and on recommendation of the Joint Inspection Team instructs the PWD to prepare the mine plan. PWD has the responsibility to prepare the mine plan and the get the environment clearance from the relevant body depending upon the size of the area. After getting the mine plan approved and the environmental clearance, the district collector grants the permission to PWD for sand quarrying on nomination basis. There is no restriction on the size of the concessions and the time period for extraction is up to 3 years. PWD calls for tenders for selection of contracts from private parties for extraction and loading of sand. All the existing quarries are having an area less than 25 Ha and currently only 12 quarries are functioning after the high court ban. In stream sand mining is not allowed in the state. Private persons are allowed to establish stockyards to store sand purchased from PWD.

Minimum Area Maximum Area Limit for holding Types of sand maximum area in Time period concession the state

Sand Quarry NA NA NA 1- 3 years

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Notified or Nomination Allocation to PWD 5.8 86.33 controlled Pricing Yes Model

The operation of sand quarry is under the control of the state and the supply of sand to the public is done directly by the government at the quarry. The PWD is supplying sand to the common public at a notified price of Rs 540 per unit

at pit head, where 1 unit equals 3 cubic metre, i.e. Rs 180 per cubic metre but landed rates including transportation cost is much higher than the notified rates. Sales

The state has constituted District Level and Taluk Level task Force, under the chairmanship of District Collector/ Taluk Tahsildar, to curtail illegal quarrying and transportation of sand. Further three regional flying squads have also been formed by the DMG for monitoring. The Online Mining Tenement System has already been implemented to all existing sand quarries and the state has released an order to mandate the registration of all sand carrying vehicles in the state with the PWD. The state has also implemented QR code system for to examine the genuinity of the online transport permit. After the ban of high court on sand mining in the state the sale price for sand in Chennai including the transportation fare has increased to more than Rs 40,000 for a truck of sand of around 30 Tonnes i.e. Rs 1300-1400/ton. Before the ban, sand was available for Rs 20,000 for a truck of sand. The state is in the process to develop a policy for promotion of m-sand in the sand. DSR Status

The District Survey report has been prepared in co-ordination of Geological Survey of India for 18 districts. The report for the remaining 12 districts is in progress and will be prepared in some time. Demand Supply Assessment

As per the PWD estimate, the demand of sand in the state is estimated as 53.71 MTPA. The total supply of sand in 2016-2017 was 18.36 MT with 15.12 MT from river sand and 3.24 MT from M-sand. And the deficit in the state is estimated at 35.56 MT. Further, recently due to court order, 32 sand quarries have stopped and the deficit is expected to further increase. The Government is planning to meet this deficit through promotion of M-sand and a proposal has already been sent to the Government for framing M-sand policy in the state. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 19 Summary of sand mining policy and process analysis of Tamil Nadu

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage Public Works  Identification of sand-bearing area. 1-2 month Offline Department  Fixing boundary and assessment of Identification of quantity of sand in reaches in each sand reaches Joint Inspection Team (under district. 1 month Offline District Collector)  Recommendation to the District Collector on grant Not defined but immediately Allotment of  Notification of the sand reach in the District Collector after getting Online sand reaches name of the PWD the environment clearance  Responsibility of preparation of mining Depends on Clearances & Public Works plan (by RQP), mine closure plan, and the size of the Offline Approvals Department getting them approved by the Deputy/ concession

(Mining Plan, Assistant Director of the concerned Environment district. clearance)  Submission of approved mining and environmental Study (EIA/EMP) to authority for issue of environmental clearance.  Other relevant clearances and approvals.   Mining and loading operation is conducted by the contractor raised by PWD through competitive bidding. Continuous Contractor  Responsible for procurement of Offline operation machinery for sand extraction, transport, and loading/unloading. Operation and  Capital and operating expenses Monitoring  Overall monitoring responsibility lies with District Monitoring Committee. Department of  Constitution of District Level and Geology & Continuous Taluk Level, Task Force. Offline/ Online Mining, TN/ operation District Collector  Constitution of regional flying squads for arresting for illegal quarrying/ transportation.  Selection of transporters Continuous Transporter  Fixing of transportation charges Offline operation based on travel distance. Transportation Department of  Issuance of online transport permit Continuous Geology & with QR scan code by the department Online operation Mining, TN Public Works  Registering all the sand carrying Continuous Department vehicles in the state. operation (PWD) Public Works  Getting orders through the sand portal Continuous Sales Department  Delivering the sane to respective Online operation (PWD) customers

3.12 Telangana

Regulatory Provisions

Telangana after bifurcation from Andhra Pradesh in 2014, adopted the Andhra Pradesh Mineral Concession Rules, 1966 for the minor minerals. The responsibility of the minor mineral “sand” is taken care of by the Department of Mines & Geology, Telangana. For sand there is separate policy i.e. New Sand Mining Policy 2014.

Sand extraction and sales in the state other than in respect of I and II order streams and patta lands, is done through Telangana State Mineral Development Corporation Limited (TSMDC). TSMDC Ltd. extracts and supplies sand from III order and above order streams (Sand reaches near the river), and by de-silting of reservoirs and tanks. Business Model

The allocation of sand blocks is done on nomination basis to TSMDC and further TSMDC selects contractor to carry operations through competitive bidding process. There is no restriction on the size of the concessions and the maximum time period for extraction is 5 years. However, the period of sand extraction from the allotted area is as per the local conditions, reflected in the Approved Mining Plan and CFO.

Minimum Area Maximum Area Limit for holding maximum Types of sand area in the state Time period concession

Mining Lease NA NA NA 5 Years

Business Model Sub-model Process followed Separate Production Revenue FY17 accounting for FY17 royalty (Yes/ (Rs. Crores) No) (MTPA)

Notified or controlled Nomination Allocation to Yes 12.6 434 Pricing Model TSMDC

The Chairman, District Level Sand Committee shall allot the specified sand bearing area to Telangana State Mineral Development Corporation Limited for extraction of sand on submission of approved mining plan from the Deputy Director of Mines & Geology of the Region concerned, Environmental Clearance from State Environment Impact Assessment Authority, and Consent for Establishment (CFE)/Consent for Operation (CFO) from Telangana State Pollution Control Board. In case of the sand cast in pattalands, the pattadar is allowed to de-cast sand to make the land fit for agriculture on application to the Assistant Director of Mines & Geology concerned. No one other than the pattadar is allowed to be involved in de-casting process. Before grant of permission to extract sand in patta land the Assistant Director of Mines & Geology takes up joint inspection of the pattaland with the Tahsildar, to identify the pattaland possessor/ occupier, Mandal Agriculture Officer, to certify that without de-casting the pattaland is not fit for agriculture, Ground Water Department, to record the geo-coordinates of the pattaland as per boundaries fixed by the Tahsildar, assess the thickness, quantify the sand to be de-casted and give specific recommendation on the mode of de-casting i.e. manual or mechanized, Executive Engineer, Irrigation Department, to report on the location of patta land with reference to river course/bed, and the Asst. Director of Mines & Geology certifies the suitability of sand for construction. In case of I and II order streams, sand extraction is permitted for local use in villages or towns bordering the Streams for bonafide purposes other than commercial operations/public trading/stocking etc. The sand extraction from I and II order stream is as per the WALTA Rules 2004, provided that, sand extraction is not be permitted in notified over- exploited areas, sand extraction is free of cost, sand extraction for local use in Government projects is on payment of seigniorage fee, and transportation is only by means of bullock carts/tractors within the jurisdiction. The department takes care of monitoring with the help of the administrative mechanism put in place for enforcement of extraction and transportation of sand. The sand extraction is under electronic surveillance. The transit pass generated online after making payment has the security seal of Telangana State Mineral Development Corporation stamp with date, time and indicate the destination/route for tracking by way of GPS facility which will be developed.

The government is getting revenue in the form of royalty / tax, DMF, road damage fee, etc. for the extracted sand on actual basis and Telangana is the leading state in terms of revenue collection from sand. Sales

The booking of sand is done through the online portal www.sand.telangana.gov.in , which ensures transparency in the sale of sand. The government has notified the stockyard price of sand in all the districts which varies from Rs 550 to Rs 600 per cubic metre of sand, and the notified price is inclusive of Rs 40 per cubic metre of royalty applicable in state. TSMDC has the responsibility to obtain Mineral Dealer License for the stockyard under Mineral Dealer Rules, 2000 from the competent authority and establish a stockyard near to the lifting point having good road facilities and also additional stockyards near urban habitations, especially the Municipal Corporations. The validity of Mineral Dealer License is coterminous with the period of agreement. Transportation is completely owned by private transporters. TSMDC provides an online platform where all the sand transporting vehicles are registered and any consumer can book sand on the online portal provided after payment of amount for the sand, excluding transportation and loading/unloading charges. DSR Status

Telangana has evolved a system for identification and assessment of sand resources as per the existing WALT Act 2002 and WALT Rules, 2004 in place of the DSR. Demand Supply Assessment

On an average, sand consumption in the state is 12.5 million cubic meters (~ 22.5 MT) per annum, while the supply of sand by TSMDC is 7 million cubic meters (~13.23 MT) only and there is deficit of 5.5 million cubic meters (~10.5 MT). The deficit of river sand in the state is being met by use of M-sand (4 million cubic meters, ~7.56 MT) and import from neighboring states (1.5 million cubic meters, ~2.83MT). The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 20 Summary of sand mining policy and process analysis of Telangana

Activity Responsibility Sub-Activity Timelines IT Infrastructure Usage  Identification of sand-bearing area as per the WALTA Act & Rules and Department of demarcating the area with definite Identification of Mines & co-ordinates and depth to be 1-2 months Offline sand reaches Geology, permitted. Telangana  Decision on the feasibility of sand mining in the identified areas. Department of  Allotment of the sand bearing area Mines & on submission of statutory Offline Geology, clearances on nomination basis. Telangana Allotment of  Execution of lease deed in Form- sand reaches S1 with Assistant Director of Mines and Geology concerned. TSMDC 1 month Offline  Selection of contractor to carry out operations through strict  Competitive bidding.

Activity Responsibility Sub-Activity Timelines IT Infrastructure Usage  Approved mining plan from the Deputy Director of Mines & Clearances & Geology of the Region concerned. Approvals  Environmental Clearance (EC) (Mining Plan, from State Environment Impact Environment TSMDC 3 – 6 months Offline Assessment Authority. clearance,  Consent for Establishment Consent to (CFE)/Consent for Operation operate) (CFO) from Telangana State Pollution Control Board  Mining and loading operation is conducted by the contractor. Operations Continuous  Responsible for sand extraction, Offline (Contractor) operations transport, and loading/unloading. Operation and  Capital and operating expenses Monitoring Department of  Overall monitoring responsibility Mines & Continuous lies with District Monitoring Offline Geology, operation Committee. Telangana  Fixing of transportation charges based on travel distance. Continuous Transporters Offline  Delivering the sand to respective operation customers Transportation  Registration of transporting vehicles. Continuous TSMDC Online  Issuance of “Weighment Slip” by operation the department  Getting orders through online sand Continuous Sales TSMDC Online portal of TSMDC operation

3.13 Uttar Pradesh

Regulatory Provisions The minor mineral rules applicable in the state of Uttar Pradesh is Uttar Pradesh Minor Mineral (Concession) Rules 1963 and the responsibility of the minor mineral “sand” is provided to the Directorate of Geology & Mining, Uttar Pradesh. The said rules were amended from time to time and many amendments has been issued till date. Subsequently on 14th June 2017 a new “Mineral Policy 2017” was notified which mandates the auction all minerals in the state. Business Model

The allocation of mineral concession for sand in the state is through tender cum auction model (forward). The base price for the tender is annual royalty applicable for the sand. The lump-sum offer amount in e-auction is on yearly basis irrespective of the quantity to be extracted and for every consecutive years amount to be paid is enhanced by 10 percent from previous year. Other than premium, the successful bidder has to pay 10% DMF of royalty, 2% TDS and applicable GST. Dead Rent and Surface rent are subsumed within the premium to be paid by the bidder. The period of a quarry lease concession is 5 years. Apart from quarry lease, short term permits are also issued in the

state for specific purposes which are valid for a period of 6 months. Further temporary permits are granted for specific purposes for a period of 90 days only. The royalty applicable for sand in the state is Rs 65 per cubic metre.

Minimum Area Maximum Area Limit for holding Types of sand maximum area in the Time period concession state

Mining Lease, 5 Ha NR 400 Ha 5 Years Temporary Permit

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Market Model Online Tender cum Competitive Bidding No 5.9 47.7 forward auction

Trainings has been given to the team of officers of DGM and state remote sensing department as per the direction of Ministry of Mines, Government of India to implement mining surveillance system in the state. Five short term mining permits of sand of Sonbhadra district have been digitized and uploaded in the MSS System during the training sessions. Sales

The control on sale and transportation of sand in the state is with the Lessee and private transporters and there are no notified rates for the transportation of the sand in the state of Uttar Pradesh. Further, there is no restriction for the export of sand to other states and import of sand from other states. DSR Status

As per the MoEFCC notification, DSR is being prepared by the concerned Districts. Out of 68 Sand bearing districts of the State, 35 District's DSR have been prepared and approved. For the rest of the districts the report is already being prepared and expected to be released shortly. As per department estimate the price of sand is around Rs 40,000-50,000 per 10 tyre truck (30 tons) around Lucknow and during monsoon season, since there is a blanket ban on sand mining, it reaches to around Rs 1300-1600 per tonne for good quality of sand. Demand Supply Assessment

A rough estimate given by department shows demand of 45-50 MTPA is the demand in the state for sand against the current supply of around 18-20 MTPA production which is expected to increase after starting of new leases. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below.

Table 21 Summary of sand mining policy and process analysis of Uttar Pradesh

IT Activity Responsibility Sub-Activity Timelines Infrastructure Usage

Directorate of  Identification of sand-bearing area and Identification of Geology & preparation of Valuation Report 1 month Offline sand reaches Mining, Uttar  Fixing boundary and assessment of Pradesh quantity of sand in reaches in each block.  Selection of IT Platform/vendor for conduct of auction 1 Months + 1 Directorate of  Issue of NIT/Bid Documents months for Allotment of Geology &  Conduct of two stage forward auction and issue of final Online sand reaches Mining, Uttar selection of successful bidder acceptance Pradesh  Issuance of provisional acceptance letter letter/ LoI and final acceptance letter to the successful bidder 1 Month for  Responsibility of preparation of mining Mining Plan Clearances & plan, mine closure plan, environment

Approvals Study (EIA/EMP) 3- 6 Months (If (Mining Plan,  Getting approved mine plan, mine Successful area is << 25 Environment closure plan and environment Study Offline Bidder Ha.) clearance, (EIA/EMP)

Consent to  Submission of approved mining and operate) environmental plans to authority for issue 12-36 Months of environmental clearance. (If area is >> 25 Ha.)  Mining and loading operation is conducted by the Lessee. Operations  Responsible for procurement of Continuous Offline (Lessee) machinery for sand extraction, transport, operation Operation and and loading/unloading. Monitoring  Capital and operating expenses Directorate of Geology &  Overall monitoring responsibility lies with Continuous Offline cum Mining, Uttar District Monitoring Committee. operation Online Pradesh  Selection of transporters Continuous Lessee  Fixing of transportation charges based on Offline operation travel distance. Transportation Directorate of Geology &  Issuance of “royalty Pass/E-rawana by Continuous Online Mining, Uttar the department operation Pradesh  Getting orders through different sources (Agents/ direct consumers etc.) Continuous Sales Lessee Offline  Delivering the sane to respective operation customers

3.14 Uttarakhand

Regulatory Provisions

The Minor Mineral rules applicable in the state of Uttarakhand is Uttarakhand Minor Minerals (Concession) Rules, 2001 and sand is governed by the Uttarakhand Minor Mineral (sand, bajri, boulder, brisk etc.) Policy- 2015. The responsibility of the minor mineral “sand” is provided to the Geology and Mining unit under Directorate of Industries, Uttarakhand. There are two types of sand concessions in the state: Mining Lease - A mining lease is granted for revenue land for a period of 5 years and for private land for a period of 1 year. Size of the concessions vary from 5 Ha to 50 Ha however, the maximum limit of area of mining lease which a person can hold in the state is 5 mining lease or 400 acre. Mineral picking works - The short terms contracts are allotted for temporary period from 1st Oct to 15th June. These are allotted through lottery process. Size of concessions allotted for mineral picking works can be more than 5 Ha. Business Model

The allocation of the mining leases for sand reaches in the state is planned through online tender cum forward auction model with a reserve price which is based on the quantity of sand available in the area multiplied by the royalty applicable which is lump sum in “Rs/annum” which is calculated based on the extractable quantity of sand from the particular area. The auction and tender documents are still not available and are expected to be released shortly.

Minimum Area Maximum Area Limit for holding Types of sand maximum area in the Time period concession state

Mining Lease, Short term picking 5 Ha 50 Ha 400 acres and 5 ML 5 Years contracts

Business Model Sub-model Process followed Separate Production Revenue accounting for FY17 FY17 royalty (Yes/ No) (MTPA) (Rs. Crores)

Market Model Competitive Bidding Online Forward No NA 335.3* auction

*Revenue figures are for total RBM (River Bed Material). Sales

The operation and sale of sand in the state is done by the Lessee with no regulation from the state government. There are no notified rates for the transportation of the sand in the state of Uttarakhand. There is no restriction for the export of sand to other states and from others states to Uttarakhand. DSR Status

The State of Uttarakhand is in the process of preparation and finalization of DSR’s for all the sand related districts for which data are being collected by the district level officer. DSR is already ready and approved for 1 district i.e. Tehri Garwal District and rest of the districts is under preparation or approval stage. Demand Supply Assessment

There is no specific details/data available with the state regarding the state’s sand demand, consumption, replenishment etc. However, a rough estimate given by department shows the supply meets the existing demand of the state of around 39.4 million cubic meter in 2016-17. Since there is surplus sand available in the state, the prices are not very high with the sale price being around Rs 260 per tonne at the sand ghat and Rs 1000 to Rs 1200 in Dehradun. However, during the monsoons when the sand availability is scarce, the price shoots up to Rs 1500 to 1700 per tonne. The summarized version of the analysis in various parameters in terms of responsibility, timelines and usage of IT infrastructure is mentioned in the table below

Table 22 Summary of sand mining policy and process analysis of Uttarakhand

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage Geology and  Identification of sand-bearing area and Mining unit preparation of Joint Inspection Report Identification of under  Fixing boundary and assessment of 1-2 month Offline sand reaches Directorate of quantity of sand in reaches in each Industries, district. Uttarakhand  Selection of IT Platform/vendor for Geology and conduct of auction 1 Months + 1 Mining unit  Issue of NIT/Bid Documents months for Allotment of under  Conduct of auction and selection of issue of final Online sand reaches Directorate of successful bidder acceptance Industries,  Issuance of provisional acceptance letter letter Uttarakhand and final acceptance letter to the successful bidder  Responsibility of preparation of mining plan (by RQP), mine closure plan, environment Study (EIA/EMP) 6-12 Months (If area is <  Getting approved mine plan, mine 25 Ha.) Clearances & closure plan and environment Study Lessee 12-36 Offline Approvals (EIA/EMP) Months (If  Submission of approved mining and (Mining Plan, area is 25>> environmental plans to authority for issue Environment Ha.) clearance, of environmental clearance. Consent to operate)  Transfer of Environment clearance  Application for Consent for Establishment Lessee (CFE) and Consent for Operation (CFO) 1 Month Offline to District Pollution Control Board.  Other relevant clearances and approvals  Mining and loading operation is conducted by the Lessee. Operations  Responsible for procurement of Continuous Offline Operation and (Lessee) machinery for sand extraction, transport, operation Monitoring and loading/unloading.  Capital and operating expenses Geology and  Overall monitoring responsibility lies with Continuous Offline Mining unit District Monitoring Committee operation

IT Infrastructure Activity Responsibility Sub-Activity Timelines Usage under Directorate of Industries, Uttarakhand  Selection of transporters Continuous Lessee  Fixing of transportation charges based on Offline operation travel distance. Geology and Transportation Mining unit under Continuous  Issuance of “e-rawa” by the department Online Directorate of operation Industries, Uttarakhand  Getting orders through different sources (Agents/ direct consumers etc.) Continuous Sales Lessee Offline  Delivering the sane to respective operation customers

4. Detailed Comparative Analysis

This chapter presents the comparison and analysis of the sand mining policies and practices being followed by the different states. The basic comparison of regulatory framework, types of concessions, royalty structure, business model being used , sales rights, sales price mechanism, royalty applicable in the state, monitoring framework, delivery mechanism, IT infrastructure in the state for sand mining administration, landed prices of sand for consumers etc. The data facts in this section are based on the information gathered and based on the discussion with relevant stakeholders

Post data collection and state-wise analysis of the sand mining policies and procedures, detailed comparison has been carried out among the states to find out the pros and cons of the practices being followed by the states and then the best suitable practice has been selected amongst the states. The parameters in which the comparison is carried out are regulatory and legal framework, business model being followed and the IT infrastructure.

Figure 4-1 Parameters for comparison

Regulatory and Legal Business model IT infrastructure

•Rules, regulations and •Allocation model •Allocation policies •Operational control •Ordering •Royalty and taxation •Sale rights •Monitoring •Identification •Type of concessions •Delivery •Clearances and approvals

The comparison in each of these parameters and sub-parameters are discussed below:

4.1 Regulatory and Legal

4.1.1 Rules, regulations and policies

In exercise of power conferred by section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), the state governments have made rules for minor minerals in their respective states. The rules defined and followed by the respective states along with the entities/ departments responsible for the sand mining activities in the states are mentioned in the table below. In addition, the table also presents whether there is a separate sand policy available in the state. Minor Mineral Concession Rules

It has been observed that most of the states have amended the rules from time to time and have even brought out significant revisions in the rules. Eleven out of the fourteen analyzed states have changed their concession rules in the state recently in last 3-4 years and the remaining four i.e. Tamil Nadu, Telangana, and Andhra Pradesh have not changed their concession rules but have issued amendments from time to time the same. Also Andhra Pradesh and Telangana has separate policy for managing sand mining activities. Responsibility

The regulation related to sand is governed by the Department of Mines and Geology in most of the states except for Assam and Maharashtra. In Assam, Environment and Forest Department regulates sand mining activities. Also, Assam is in process of amendment of the minor mineral rules and once notified, the regulations will be in department

of Mines and Geology, Assam. In Maharashtra, Revenue and Forest Department has control over the sand mining. In Gujarat and Punjab, matters related to sand mining is taken care of by the Industries and Commerce department and in Uttarakhand, by the Department of Industries. Specific Sand Mining Policy

Apart from the Minor Mineral Concession Rules, some of the states have a separate sand policy applicable in the state that govern the regulation related to sand mining. Despite being a minor mineral, the processes involved in sand mining are very different from those in other minor minerals considering high demand-supply deficit. Also sand is different from other minor minerals in its usage by the general public. Keeping these in mind, many states have formed a separate policy of sand such as Andhra Pradesh, Chhattisgarh, Madhya Pradesh, Maharashtra, Telangana and Karnataka have notified a separate policy for sand in the states. Andhra Pradesh has framed a separate sand policy in the year 2015 and since March 2016, free sand policy is applicable in the state. Sand mining in Chhattisgarh is governed by the Chhattisgarh Minor Mineral Sand Excavation and Trade Regulation Order 2006. Madhya Pradesh brought a separate policy for sand in 2015 and is again in the process of drafting a new policy to regulate sand mining in the state. Maharashtra has Amended Sand Excavation Policy. Telangana has separate Sand Policy 2014 and related GO. Karnataka has introduced a separate chapter (IV-B) in the concession rules to regulate the permission for quarrying of ordinary sand in river bed, patta land, removal of sand bars in Coastal Regulation Zone areas of coastal districts and special provisions for production of M-sand as well as for transportation of sand and M-sand. Separate m-sand policy

A few states have separate policies to promote m-sand such as Andhra Pradesh, Telangana and Karnataka. Andhra Pradesh and Telangana have granted industry status to m-sand producing units in their state. Karnataka has reserved few blocks for m-sand plants only as end user category. Tamil Nadu’s m-sand policy is under formulation. recently Gujarat has also reduced royalty for m-sand units. Following is the summary of the latest rules, controlling authority, sand mining policy and m-sand policy of the states:

Table 23 Rules followed by the states

Department controlling sand Separate Sand Mining State Latest rule applicable mining activities Policy

Andhra Pradesh Minor Mineral Department of Mines & Geology, Andhra Pradesh Concession Rules, 1966 and Free Sand Policy, 2016 Andhra Pradesh its amendments. Assam Minor Mineral Department of Environment and Assam No Concession Rules, 2013 Forest, Assam Chhattisgarh Minor Chhattisgarh Minor Mineral Directorate of geology & Mining, , Mineral Sand excavation Chhattisgarh Rules, 2015 Chhattisgarh and Trade Regulation Order 2006 Industries and Mines Department, Gujarat Minor Mineral No Gujarat Gujarat/ Commissioner of Concession Rules, 2017 Geology & Mining ( (CGM) Haryana Minor Mineral Concession, Stocking, Mines and Geology Department, No Haryana Transportation of Minerals and Haryana Prevention of Illegal Mining Rules, 2012 Karnataka Minor Mineral Concession (Amendment) Department of Mines & Geology, Separate chapter in Karnataka Rules, 1994 and amended in Karnataka KMMCR for sand August’ 2016, and 2017

Department controlling sand Separate Sand Mining State Latest rule applicable mining activities Policy

Madhya Pradesh Minor Mineral Rules, 1996 and its Directorate of Geology and Madhya Pradesh Sand Mining Policy 2017 amendments. The latest Mining, Madhya Pradesh amendment issued in 2013. Maharashtra Minor Mineral Extraction (Vidarbha Region) Rules, 1966; Bombay Minor Mineral Extraction Rules, 1955 Revenue and Forest Department Amended Sand Maharashtra for Western Maharashtra, The Government of Maharashtra Excavation Policy 2017 Rules regulating, working of Minor Minerals, 1954 for Marathwada region Department of Industries and Punjab Minor Mineral Rules, Punjab Commerce, Mining Department, No 2013 Punjab The Rajasthan Minor Mineral Department of Mines & Geology, No Rajasthan Concession Rules, 2017 Rajasthan Tamil Nadu Minor Mineral Department of Geology & Mining / Concession Rules, 1959 and its No Tamil Nadu amendments. Latest amendment: Public Works Department, Tamil Rule 38-A introduced vide GOMs Nadu 95 in 2003 Andhra Pradesh Minor Mineral Concession Rules, 1966 and Department of Mines & Geology, New Sand Mining Policy Telangana its amendments. The latest Telangana/ TSMDC 2014 amendment issued on 26.07.2016 Uttar Pradesh Minor Mineral (Concession) Rules 1963 and Directorate of Geology & Mining, Uttar Pradesh its amendments. The latest No Uttar Pradesh (42nd) amendment issued in 2017. Geology and Mining unit under Uttarakhand Minor Mineral Uttarakhand Minor Minerals Uttarakhand Directorate of Industries, (sand, bajri, boulder, brisk (Concession) Rules, 2001 Uttarakhand etc.) Policy - 2015 Observations

Majority of the states have completely revised their minor mineral concession rules or have come up major amendments in the recent years. The responsibility of sand mining in most of the states is with the department which is competent of handling the challenges of the mining industry. The disadvantage of not having the control with the mining department is the staff in other department are not well versed with mining and consequently gap is there between the regulating body and those taking care of operations. Further many states have come up a separate sand policy which is extremely crucial considering the volume of sand consumed every year and the consumer of sand being the masses. And lastly, three states, Andhra Pradesh, Karnataka and Telangana, have come up with a separate policy for m-sand. Andhra Pradesh and Telangana have granted industry status to m-sand producing units. These states are leading producers of m-sand in the state.

4.1.2 Royalty Collection and units applicable

The royalties in respect of mining leases is specified in Section 9 of the MMDR Act, 1957. States have mentioned the royalty structure in their respective minor mineral concession rules. Royalty is a variable return and it varies with the quantity of minerals extracted or removed. It is a regular payment, usually based on the volume of minerals extracted, made by lessee/contractors to states as consideration for the right to exploit particular mineral resources.

Royalty forms a vital part of a fiscal regime of mining and an important means of revenue realization for the government. However, they also increase in price of the sand for consumer perspective. The royalty being collected by the different states is shown in the table below.

Table 24 Royalty applicable in different states

State Royalty applicable Units applicable in the state Royalty in Rs. per tonne1 as per Rules/ Acts

Andhra Pradesh No royalty Per cubic metre 0

Assam Rs. 140 per m3 Per cubic metre 74

Chhattisgarh Rs. 20 per m3 Per cubic metre 10.6

Gujarat Rs. 40 per tonne Per tonne 40

Haryana Rs. 40 per tonne Per tonne 40

Karnataka Rs. 60 per tonne Per tonne 60

Madhya Pradesh Rs. 100 per m3 Per cubic metre 52.9

Maharashtra Rs. 400 per brass (100 ft3) Per brass 74

Punjab Rs. 60 per tonne Per tonne 60

Rajasthan Rs. 30 per tonne Per tonne 30

Tamil Nadu Rs. 8.5 per 10 ft3 Per Unit (1Unit=100 feet3) 15.7

Telangana Rs. 40 per m3 Per cubic metre 21.2

Uttar Pradesh Rs. 60 per m3 Per m3 31.7

Uttarakhand Rs. 154/176/187 per m3 Per m3 81.5/ 93.1/ 98.9

1 The units are changed to per tonne using bulk density of 1.89 gram per cubic meter, Source: MoEFCC’s Sustainable Sand Mining and Management Guidelines 2016

Figure 4-2 Royalty comparison across states (Rs per tonne)

93 Royalty Comparison of the State Per Tonne 74 74 60 60 53 40 40 30 32 21 15 11

AP PB

UP UK

CG MP

KTK

Telan Assam

The royalty for per tonne of sand varies from Rs 0 to Rs 93 in different states in the country. There is a significant difference in the royalty structure from one state to other and the bulk density used for conversion of units of royalty are also different in different states. Some states use 1.5 tonnes per cubic metre while others use 1.89 tonnes per cubic metre as mentioned in MoEFCC’s Sustainable Sand Mining and Management Guidelines 2016. This can create discrepancies in the actual quantum of demand and supply for the sand in the state. Andhra Pradesh is the only state from the analyzed states which does not charge any royalty for sand. The unit used for royalty calculation should be uniform across the country as it will help in comparison of the royalty collected from sand mining and also in estimating the production and demand of sand in the state. Further, the unit used should be Rs per tonne as weighing of sand is easier than measuring the volume of sand. By installation of weigh bridges, the quantity of sand in each vehicle can be measured whereas in measuring volume, the capacity of the vehicle is used without considering the over loading factor.

4.1.3 Identification

The process of identification of sand reaches in most of the states is taken up by the relevant department responsible for sand mining in the state. The report prepared during identification of sand reaches also varies from state, where most of the states go for joint inspection report or site appraisal report. Gujarat is the only state which prepares a detailed geological report for block identification. Geo-tagging of the block is also a common practice in many states, however some of the states still go with manual fixation of boundary of the blocks which makes the monitoring task complicated for illegal extraction from non-notified areas. The methodology followed by most of the states is described as follows:

 Based on the information available with the department, the relevant person authorized for the job obtains the map of the area from the revenue officer or the tehsildar and conducts a spot inspection regarding availability of area, to check if the area is not reserved for some other purpose and can be allotted for sand mining. If he finds sufficient availability of sand in the area, the area is demarcated and put for auction or allotment or can be notified for mining by the State Mining Corporation or Panchayat.  Many states have taken up Geo-tagging of the demarcated area which can be useful while conducting physical inspection as the boundary of the demarcated area can be checked using the coordinates recorded in GPS device, and the monitoring team can be sure of whether any mining activity is going on outside the permitted area or not.

 In Uttar Pradesh, the district mining officer prepares the valuation report to access quantity of sand available in the block during the identification of sand blocks. However, actual quantity to be mined is as per environment clearance.  In Karnataka, Taluk Level Sand Committee is formed which is responsible for site inspection and identifying sand blocks for the purpose of tender cum auction or for reservation. The committee estimates approximate extractable sand available in each identified block by restricting quarrying to three meters depth or water level whichever is less, with the assistance of the Officers of the Revenue, Public Works, ports and Inland Water Transport Department, Water Resources, Mines and Geology and Forest, and the identified blocks are incorporated using the co-ordinates in the certified sketch. The committee also submits joint inspection report and documents with a clear recommendation report to the district committee for the purpose of notification of sand blocks and their extent, which may be either individual blocks or cluster of blocks, for tender- cum- auction or for reservation for government works or for extraction of sand by Central government or state government or body corporation owned or controlled by the Central government or state government.  In Gujarat, a detailed geological report of each sand reach is prepared by the respective district’s Assistant Geologist before putting it for auction. The potential areas of the quarry lease are identified and demarcated using DGPS and topographic and geological maps are prepared using total station. With reference to the rules, evidence of mineral resources are established using geological report. The geological report contains estimated resources in the blocks along with other information e.g.: details of the area, DGPS survey, details of infrastructure and environment, geology of the area, drainage and geomorphology, exploration status, geological mapping, laboratory studies of the samples etc. The responsible party for identification of the reaches along with the reports being generated by the responsible authorities are mentioned in the table below:

Table 25 Identification details for each state

Standard Template Identification Geo-Tagging or co- Available as per State Reports prepared responsibility ordinates mapping Rules/ Regulations/ GOs

Andhra No District Level Committee Site Appraisal Report No Pradesh No Assam District Forest Officer Initial valuation report No

Mining Inspector & No Chhattisgarh Joint Inspection Report No Revenue Officer No Gujarat Assistant Geologist Geological Report No

Department of Mines & Initial Survey Report, Joint Haryana Yes No Geology Inspection report Taluk Sand Monitoring Yes Karnataka Joint Inspection Report No committee Madhya Yes District Office NA No Pradesh

Maharashtra NA NA No No

Yes Punjab District Level Committee Site Appraisal Report No

Standard Template Identification Geo-Tagging or co- Available as per State Reports prepared responsibility ordinates mapping Rules/ Regulations/ GOs

Joint inspection Report/ Yes Rajasthan District Committee Mauka Report (for private No land) Department of Mines & Tamil Nadu NA No No Geology/ PWD District Level Sand Telangana Joint Inspection Report No No Committee District Mining Officer & Yes Uttar Pradesh Valuation Report No Surveyor Yes Uttarakhand District Committee Site Appraisal Report No

However, there are multiple issues with the existing models of identification. One of the major issue with the existing model is that in none of the states the officer responsible for spot inspection has standard template available in compliance with the Rules and MoEFCC Guidelines, so that he can check across all parameters based on which it is decided whether the block should be taken up for auction or notified for mining by the State Mining Corporation or panchayat. Preparation of detailed geological report, in Gujarat, for each block and putting the blocks for auction based on the geological report is by far the best practice followed in identification process. Geological Report is prepared by the District Assistant Geologist of the concerned district. And the quantity of mineral resources are established using geological assessment. The report contains details of the area, DGPS Survey, infrastructure and environment, geology of the area, drainage and geomorphology, exploration status, geological mapping, laboratory studies of the samples etc.

4.1.4 Clearances and approvals

The clearances and approvals required in most of the states is more or less similar with little variations from one state to another. First of all, no-objection certificate is required from the Revenue Department that that the land is not reserved for some other purpose or it does not comes under forest land or in under any litigation. Mining plan and environment clearance report is required to be submitted in all the states before commencing the mining operations. And the granting authority for environmental clearances is based on the size of the block as mentioned in the table below:

Table 26 Environment clearance approving authority for individual mine lease

Size of the block Category Approving authority

0-5 Ha B2 DEIAA/ DEAC

>5 and <25 Ha B2 DEIAA/ DEAC (In case of cluster)/ SEIAA/ SEAC (Individual)

>=25 and <50 Ha B1 SEIAA/ SEAC

>= 50 Ha A MoEFCC

Other clearances required in many states are, Consent to operate (CTO) and consent for approval (CFA), from the State Pollution Control Board and it is the responsibility of the Lessee to get the clearance for the same. Apart from these, Maharashtra asks for approval from the Gram Sabha and the opinion of the Ground Water Survey and Development Agency, and in case of Creek Mining, approval from the Maharashtra Maritime Board. The details of the types of clearances required and the responsibility of taking the clearances are mentioned in the table below:

Table 27 Clearances and responsibility

State Types of Clearances Responsibility

Andhra Pradesh MP, EC Department of Mines and Geology

Assam MP, EC, CFA, CTO Lessee

Department does it on behalf of Gram Chhattisgarh MP, EC, approval of Gram Sabha Panchayat

Gujarat MP, EC, CTO Lessee

Haryana MP, EC Lessee

Karnataka MP, EC Lessee

Madhya Pradesh MP, EC, CTO MPSMC/ Lessee

EC, Approvals from Maharashtra Maritime Maharashtra Board, Opinion of Ground Water Table and Lessee Development Agency

MP, EC - Industries and Commerce/ Mining Punjab MP, EC, CTO Department CTO - Lessee

Rajasthan MP, EC, CTO Lessee

Tamil Nadu MP, EC PWD

Telangana MP, EC, CFE/CFO TSMDC

Uttar Pradesh MP, EC Lessee

Uttarakhand MP, EC, CTO Lessee

The responsibility of preparation of mine plan and getting environment clearance is with the Lessee in most of the states. However in Andhra Pradesh, Chhattisgarh and Punjab, it is the responsibility of the mining department. The advantage of taking up the clearance by the Mining Department ensures that the regulations laid down by the government as well the Ministry of Environment, Forest and Climate Change are properly followed. The department of mines and geology, in Chhattisgarh and Andhra Pradesh also have the responsibility of preparation of mine plan on behalf of the Panchayat. The benefit of handing over the responsibility to the department

is that the time taken in preparation and approval of mine plan is relatively less than in other states. However, the flaw in it is that the responsibility of preparation and as well as approval of mine plan is with the DMG. Designating the responsibility of getting the environmental clearances to the mining department is the better way considering the time taken in getting the clearance and following of the regulations laid and this unknown risk is considered by bidders in their bid. In Andhra Pradesh, Chhattisgarh and Punjab, the responsibility is with the mining department and in Telangana, Tamil Nadu and partially in Madhya Pradesh, it is the responsibility of the government body responsible for sand extraction. However, there should not be a case of conflict of interest as in Chhattisgarh, where the same agency is responsible for preparation and approval of mine plan.

4.2 Business Model

4.2.1 Allocation model and realization to state government

The mode of allocation of concession for sand varies from state to state. The allocation model adopted depends on the objective of the state government. Some states who want to maximize revenue go for market model (competitive) i.e. forward auction with no intervention from the state in sale of sand, while other states that want to keep the prices under control go for controlled prices or notified prices and keep the sale right with themselves.

Figure 4-3 Different models for allocation

SHGs/ Panchayat (AP, Fixed Rates for raising CG) of sand at sand reaches

Notified/ Controlled pricing State Corporations/ Bidding for selection of PWD (Telangana, MP*, contractors for raising of TN) sand

Business Models Bidders Tender Based Forward (Assam**) (Assam**)

Market model Bidders Auction Based (HR, PB, Forward (HR, PB, MH) MH)

Bidders Forward (GJ, KTK, RJ, Tender cum Auction UP, UK) (GJ, KTK, RJ, UP, UK)

*MP earlier followed market model also. **Assam- As per current business model. Assam is undergoing changes in its Rules. The allocation of sand mines in different states in following ways:

Market Model In market model, allocation is undertaken using one of the following methods: a) Tender b) Auction c) Tender cum auction mode In tender, the price or premium against the bidding parameter is quoted by the bidders and the highest bidder gets the mineral concession. In this model, the state earns a fixed amount quoted by the bidder. E.g. Assam is currently following this method, however, their rules are undergoing change and once amended, the state may opt for a tender cum auction method of allocation. In auction, the bidder is aware of the ongoing or highest price or premium quoted by the other bidders and can continuously revise its bid till conclusion of the auction process. The bidder quoting the highest wins the sand block. The realization to the state in this model is high, as the state retains the royalty as well as the auction premium. However, the model also leads to increase in prices for the end consumers, as the state government doesn’t have any control on the prices at which the private contractors sell the sand. Haryana, Uttarakhand and Maharashtra conduct such auctions online. Madhya Pradesh too followed a similar model in the past, and sand concessions in 33 districts were allotted through online auctions. The tender cum auction is a two stage process similar to the one followed in the case of major minerals auctions, where in the first stage along with the technical bid an initial price offer is also submitted. Subsequently, only a selected number of bidders (50% of the technically qualified bidders or as per the notification inviting tender) go to the auction stage. The method has similar benefits and downsides as in the case of simple auctions discussed above. This allocation method is followed in the states of Gujarat, Karnataka, Rajasthan, Uttar Pradesh and Uttarakhand. Notified or controlled pricing model In this model, the state governments allocate their sand blocks to their state mining corporations or SHGs or Panchayats on nomination basis. Clearances and approvals are procured by the state only and mining operations are handled either directly by the government agency or by the raising contractors that are hired. Further, the sale of sand is undertaken by the state government and revenue accrued accordingly. Prices are notified by the government under this model. In Telangana, sale price at the sand depot, which is located near to demand centres, is fixed including the royalty, and the entire sale proceeds go to the Telangana State Mineral Development Corporation. Also in Andhra Pradesh, the maximum sale price (landed basis) has been fixed district wise. Other than Telangana and Andhra Pradesh, Madhya Pradesh also follows this model in 18 out of the 51 districts. Tamil Nadu allots sand mines to their Public Works Department (PWD) and Chhattisgarh to their Gram Panchayats on nomination basis. Further, Madhya Pradesh is also in the process of drafting a policy for allocation of sand mines on nomination basis to the Gram Panchayats in 33 districts on application.

Table 28 Summary of Pros and Cons of each business models followed in different states

Model Notified Pricing/ Controlled Pricing Market Model

• Considered as market Key merits (Govt. perspective) • Uniform and notified Sale determined regime Price • Higher revenue for Govt. • Profit with State Govt. • Minimum governmental • Relatively better operations resources and monitoring control • Transparent method of allocation

Model Notified Pricing/ Controlled Pricing Market Model

• Prone to Illegal mining/over Key demerits (Govt. perspective) • Lesser revenue for Govt. in exploitation case of lower sale prices • Environmental Concerns • Significant govt. resources • Higher sale prices for required consumers • Considered as Govt controlled • Chances of cartelization regime during bidding • Sale prices may still be higher • Chances of cartelization by in case of supply and bidders for supply and prices monitoring not sufficient control

The summary of the models followed by different states and their productions & revenues is tabulated below:

Table 29 Summary of business models followed in different states

Business Sub-model Process followed Separate Revenue Production Model accounting FY17 FY17 State for royalty (Rs. (Yes/ No) (MTPA) Crores)

Notified or Nomination Notification of Andhra Not controlled identified reaches Not Applicable 10 Pradesh* Applicable pricing model for sand extraction

Market model Competitive Assam** Offline tender No 5.6 30-35 Bidding

Notified or Nomination Yes Allocation to Chhattisgarh controlled 9.67 10.6 Panchayats pricing model

Market model Competitive Tender cum Yes Gujarat 31.2 115.1 Bidding forward auction

Market model Competitive Yes Haryana Forward e-auction 19.2 265.9 Bidding

Market model Competitive Tender cum Yes Karnataka 4 25.2 Bidding forward auction

Notified or Nomination Allocation to Yes Madhya controlled MPSMC (in 18 49.14 240 Pradesh*** pricing model districts)

100