Politicians aren’t only messing with Tamil Nadu’s water – they’re making Rs 20,000 crore from sand

The scale of sand mining in the state is staggering. The first part of an in-depth investigation.

img_0001

Stepping onto the bank, the first thing that’s visible is a ten-wheeled tipper.

It grinds to a halt at the end of a queue of similar trucks. Beyond it stretches a vast riverbed. That is the Thenpennaiyar, one of the larger rivers in central Tamil Nadu.

It is summer and there isn’t a drop of water in the river. The riverbed, with its carpet of sand, is warming under the sun. It looks like it has been ploughed by a giant tractor. Long trenches are separated by ridges that are wide enough to serve as roads for the tippers.

All along the monochrome riverbed are queues of trucks.

At the head of each queue is an excavator. The arm of the machine dips into a trench, pulls out a shovelful of sand and pours it into the tipper waiting alongside.

As the tipper fills up, it moves away, and another tipper takes its place.

It’s hard to tell how far this sand quarry stretches. The trenches are as deep as seven metres. The ridges are all that is left of the original riverbed. A scab of dark earth is visible at the bottom of one trench. So much sand has been scraped away that the Thenpennaiyar’s clay base stands exposed.

According to locals, anywhere between 2,500-3,000 tipper-loads of sand leave from here each day. With each tipper designed to carry 20 tons, that’s 50,000 tons of sand a day.

This quarry in Villupuram district, about an hour from Pondicherry, is a good introduction to the daunting scale of sand mining in Tamil Nadu.

The Thenpennaiyar enters this part of northern Tamil Nadu from Karnataka and flows through the district for about 100 kilometres before entering the neighbouring district of Cuddalore. In this stretch, said locals, there are two more quarries of similar size. And that’s just one river in one district.

In its investigation last year into illegal mining in Tamil Nadu, Frontline flagged rampant sand mining in most major rivers in the state – among others, it named the Cauvery, Palar, Vellar, Thenpennaiyar and Amravati in north and central Tamil Nadu, Vaigai in the south and Bhavani in the west. Miners, said the article, “have not spared even the tributaries of these rivers and also streams”.

This scale is palpably new. Till the mid-1980s, sand mining was a small scale activity. Villagers building houses went down to the river. City-dwellers who needed sand turned to local transporters who would send labourers to the sandpits. They would lug back some sand and pay a small amount to the local panchayat.

Look at the trade now and you see something very different. It is controlled by a handful of people whose fortunes wax and wane depending on which Dravidian party is in power. Sand is now mined at a scale that violates mining norms and ravages rivers and local ecologies. It has also become a violent trade. People opposing it have been thrashed. Many have been killed.

In these days, when we are trying to understand why Tamil Nadu is grappling with Karnataka for Cauvery water, the role of rampant sand mining in creating these water shortages cannot be ignored. That said, little here is unique to Tamil Nadu. Large parts of India have seen similar transformations in their local sand markets. For the most part, however, these have remained poorly understood.

Enter the politicians
The change began in the late 1980s, when a construction boom started in the state. As demand for sand grew, micro-level politicians pushed out the erstwhile transporters and took over the trade. Said a Chennai-based researcher who has studied the sector closely, “Small-time local leaders like councillors, panchayat members, union secretaries of political parties began supplying sand.”

Their dominion, however, lasted for just one or two years. As demand for sand rose, said the researcher, who did not want to be identified fearing retribution by politicians, there were frequent quarrels between these local leaders which had to be resolved at the district level. In the process, he said, “District leaders began realising that sand – like liquor – is a way to make money.” And so, control over the sand trade moved from the local to the district level.

At this time, sand could be mined only from government-approved mining yards. To access these, transporters used to buy mining permits at periodic auctions conducted by district authorities. As larger political formations entered the sand trade, said the researcher, these auctions became contentious. Politicians began backing contractors. Caste entered the dynamic. “If the fleet operator belonged to a certain caste, then political formations would ask another member from their own caste to enter the business and support that person,” he said.

There were group clashes and murders over manal – Tamil for sand. “In some cases, auctions could not be held. Or there were open fights at the place of auction if the rival bloc was favoured,” he said.

In all, the trade became a contested ground for political groups. Some yards went to the DMK. Others to the AIADMK. Or to other parties. Things went on like this till the early 1990s.

Exit, Politicians. Enter, Sand Miners
In the next iteration, district politicians lost control over sand mining and a small group of sand miners took over.

This happened twice, said the researcher. First in the early 1990s when a clause was inserted in Tamil Nadu Minor Mineral Concession Rules, 1959. The clause said the government may grant a mining lease without an auction. The state, ruled at the time by the AIADMK, used this clause to give an exclusive right to mine on one sand quarry on the Palar river to a contractor named O Arumugasamy. Simultaneously, said the researcher, all other sandpits in the vicinity were shuttered.

This model was replicated across the state. A report by a citizens’ committee on illegal sand mining in Karur district quotes a 2001 order of the Madras High Court which said as many as 35 leases were granted using this clause. Most of these, said the researcher, went to Arumugasamy.

The High Court order said these were discretionary allocations. It’s not clear how and why Arumugasamy was chosen.

Scroll emailed questions about the policy change to the office of J Jayalalithaa, the Chief Minister of Tamil Nadu, who was also at the helm of the state when this shift took place.

The same questionnaire was also sent to KN Venkatramanan, a retired IAS official who now works as the Principal Secretary to the Chief Minister. Related questions were sent to Arumugasamy.

In all three cases, phone calls were made to their offices informing them about the emails. In Arumugasamy’s case, a text message was sent to his mobile phone and a local reporter, who knew Tamil, spoke to him on the phone and informed him about this questionnaire. There was no response. This article will be updated if they respond.

This shift had large impacts, according to the researcher. Rival political parties’ role in sand mining came down. Inside the AIADMK, local leaders lost access to an independent source of funds, which increased their dependence on the high command. In the trade, a monopoly began to take shape.

This arrangement – of mining contractors replacing district leaders – continued even after 1996 when the AIADMK was voted out. In some cases, said the researcher, the contractors changed. “In others, existing contractors tapped folks close to the new leadership and asked them to take the contracts, saying they would do all the work in the background,” said the researcher.

Things continued like this till 2003. And then, there was a minor upheaval. That year, the AIADMK, which was back in power, nationalised sand mining.

The permit raj
The immediate trigger, said the researcher, was a 2001 High Court order. Which in turn was the result of a public interest litigation filed by PR Kuppusamy, a lawyer who challenged the government’s nod for sand mining at Mayanur, an ancient town in Karur district, located on the banks of the Cauvery. In his petition, Kuppusamy detailed widespread illegalities by sand miners. Among other things, they were using heavy earthmoving equipment, mining outside allotted quarries and driving vehicles onto the riverbed. Upholding Kuppusamy’s petition, the High Court squashed all leases granted under section 39 of Tamil Nadu’s Minor Mineral Concession Rules, which allowed the state to grant leases without an auction.

In response, on October 1, 2003, the state government decided only its Public Works Department would mine sand. As things turned out, the PWD was unable to meet demand. Said the researcher, “If Chennai needed 10,000 truck loads of sand, the PWD could supply just 200.” Construction came to a standstill. In response, the government created a new model where PWD could outsource loading of sand onto trucks to contractors.

This is how it was supposed to work: the PWD outpost at a quarry would give a sand mining permit to anyone who wants sand and the loading contractor would, after inspecting the permit, load the sand.

In practice, however, the contractors ran the show, illegally stockpiling and selling the sand. A team of the People’s Union of Civil Liberties reported after a fact-finding trip along the Palar and Cheyyar basins: “Total absence of any official of government at the quarry sites or stockpards. Locals also report that officials are seldom to be seen in the mining sites.”

The researcher agreed with the assessment. “No one could get sand in return for a demand draft,” he said. “The loading contractors would move sand out of the quarry to large depots. Anyone who wanted sand had to go there, pay in cash and get a lorry loaded.”

Jayalalithaa, Arumugasamy and P Rama Mohana Rao, the Chief Secretary of Tamil Nadu, did not respond to Scroll’s questions on how the loading contractor model functioned. But, according to the PUCL member, mining continued like before. The only thing that changed, he said, was the legal basis for appointing contractors.

Both the researcher and the PUCL member see the decision to nationalise sand as a calculated move. These were no longer discretionary allocations like before. Instead, contracts would now be allotted by the PWD after auctions.

Despite the switch to auctions, said the researcher, of the 40 or so leases, between 25-30 went to Arumugasamy. The questionnaires sent to both Jayalalitha and Venkataramanan included questions about their adoption of the loading contractor model. They were specifically asked if the government wanted to change the legal basis per which sand miners were appointed. They were also asked to respond to critics’ allegation that most contracts went to Arumugasamy. There was no response.

Said the PUCL member, “The whole thing is a cartel. No one else can come in, and his bids and those from his benamis will be the lowest. Once a tender has been given, who is monitoring if the conditions are being followed?”

In 2006, Tamil Nadu voted out the AIADMK and brought back the DMK. Arumugasamy’s empire, said the researcher, shrank once more to just the Palar. Five years later, when the AIADMK won the election, the leases came back to him. Questions were sent to Jayalalithaa, Venkataramanan and Arumugamsamy asking why his sand mining business rose whenever the AIADMK came to power and fell when the party was voted out. There was no response.

This was a short-lived innings, though. According to the researcher, the contractor took an AIADMK district member as his partner. “When the party high command got to know, the district official was fired and Arumugasamy’s contract was cancelled,” said the researcher. According to him, another person, Shekhar Reddy, known to other senior leaders in the AIADMK, now does sand mining in the state. Jayalalithaa and Venkataramanan did not respond to Scroll’s questions about why the miner was changed.

The puzzle about the industry
It is an interesting trajectory. The ruling parties, paradoxically, took sand mining away from their own party workers and gave it to businessmen.

To understand why, you have to first know how the trade works.

As per the law, said the researcher, a unit of sand is to be sold at Rs 950. Of this, said this report in the Times of India, the loading contractor are supposed to get Rs 220. In other words, the state gets 76% of the value of the sand. But that is not how it works. People buying sand have to pay, said the researcher, Rs 4,000 or more per unit at these private depots. This amount, he said, “varies as per their whims and fancies.”

In other words, a second market for sand got created. And most of the value of the sand being sold was captured by this market. The state got a smaller share. This is directly analogous to what happened in Odisha’s iron ore boom. The state captured a fraction of the Rs 200,000 crore worth of ore it exported.

What about Tamil Nadu? What percentage of the eventual sale price of all this extracted sand came to the state exchequer? It’s hard to say. In large part because no one quite knows how much sand has been mined from the state’s rivers. Take the PUCL report. It found PWD officials who were supposed to monitor the mining were missing from these quarries. Nor can one calculate on the basis of government norms which restrict how deep the miners can go. Travel around in the state and you hear of trenches as deep as 7-9 metres.

According to the researcher, sand mining is probably a Rs 20,000 crore a year industry. As the chart below shows, that number could well be higher.

img_0002

However, a very small slice of this reaches the state coffers. Tamil Nadu’s budget estimates for 2014-15 peg incomes from sand quarries at Rs 216.82 crore. The previous year, that stood even lower at Rs 133.37 crore.

Questions about the scale of sand mining in the state – ranging from its tonnages, annual turnover and the critics’ fears that the state was foregoing much of this revenue – were sent to Jayalalithaa, Venkataramanan, Arumugasamy and P Rama Mohana Rao. They did not respond.

There is an important question here. Where does the rest of the money go?

It’s not an easy question to answer. These transactions are in cash and will not show up in audited accounts of sand mining companies like Arumugasamy’s Senthel Building Material Manufacturing Company.

However, people in villages see this money circulating. A part of it, they say, goes to local party workers. A farmer from a village near Karur claimed that “about Rs 1,000 from each unit is shared amongst the local party workers: Rs 25 to the person in the village, Rs 150 to the taluka head, Rs 350 to the district members, and so on.” This is echoed by both researchers and politicians like K Kaliyan of the Communist Party of India (Marxist).

Abhijit Sen, a former member of the erstwhile Planning Commission, said India’s political parties “maintain their party cadres predominantly through the construction sector”. In Punjab, people close to the ruling Akali Dal control both sand mining and stone crushing. In West Bengal, syndicates control urban infrastructure projects. Another part of this money, said the researcher, goes into fighting elections. Be it for campaigning or for paying voters in cash.

These questions – about money flowing from sand mining to AIADMK’s cadre and being used in elections – were listed in the questionnaires sent to Jayalalithaa, Venkataramanan and Arumugasamy. This article will be updated when they respond.

For now, Sen’s observation triggers a fresh question. If a ruling party depends on the mining of a mineral resource to maintain itself, what is the fallout?

What it all means
Some years ago, farmers from 12 villages in Ettayapuram Taluk of Tuticorin district decided to stop sand mining. Among other things, they seized earthmovers and trucks. In response, said an article by R Seenivasan, a PhD Candidate with the University of Westminster, the farmers “were slapped with criminal charges and branded as ‘extremists’ who take ‘law into their hands’. Many farmers were sent to jail for days and charged for ‘unlawful assembly, rioting, obstructing government work and officers,’ under various penal sections of the Indian penal code.”

This is a common refrain. The police similarly slapped cases on the women of Kalathur, a village on the Palar, when they protested last year against sand mining. When this reporter met V Chandrasekhar, who has been agitating against sand mining in Villupuram and Pondicherry, it was shortly after Jawaharlal Nehru University student leader Kanhaiya Kumar was beaten up in the Patiala House complex. “That happens every day here. The police is an instrument of the state. No one would dare go to the police here,” said Chandrasekhar.

This pattern, of siding with the miners and not with the locals, shows up in poor supervision of sand mining. As the PUCL study found, sand was being mined till almost a 10 metre depth in the Palar. It also shows in the state government’s support for sand mining over, say, environmental concerns.

Responding to a petition filed in the Madras High Court by the Cauvery Neervala Athara Pathukappu Sangam, a non-profit in Erode, the state government argued that sand mining doesn’t need an environment clearance since quarrying operations were carried out by the PWD scientifically.

When the court insisted on an environmental impact assessment, a lawyer in the Madurai court who fought against sand mining, told Scroll on the condition of anonymity, the state government rushed through an environmental clearance in just three months.

Scroll asked Jayalalitha, Rama Mohana Rao, Venkataramanan and Arumugasamy for their comment on the charges that the state government and the ruling party have acted in a manner which benefits sand miners and not local communities. There was no response.

The combined fallout of all this has not been pretty. As these quarries scour their way along Tamil Nadu’s rivers, the state’s water crisis is worsening. Groundwater levels, for instance, are collapsing across the state. That said, the ravages of sand mining go beyond ecological damage. The state’s villages and politics have been damaged as well. More on that in the next story.

Link: http://scroll.in/article/815138/tamil-nadus-political-parties-are-making-money-from-sand-worth-a-whopping-rs-20000-crore-a-year

 

 

Leave a Reply

Your email address will not be published.