Sand crisis could push up cost of new flats in Mumbai

Mumbai’s construction industry seems to have slowed down this year, and the recession has nothing to do with it. What has, in fact, affected it is the shortage of sand, a key raw material required for making concrete. The shortage has resulted in a building slab being cast in 12 days against the normal eight. An average building of 14 floors with two wings of 1 lakh sq ft, requires 2,500 trucks of sand just for civil work.

Abhishek Lodha, director, Lodha Group, says the crisis could impact indirect costs for the end buyer.

Developers say the shortage situation is due to new regulations that stipulate sand sales must now be approved by local officials (gram panchayats). The process has resulted in a substantial rise in the time taken for developers to buy the key raw material. Builders say this may have happened after a case in court where sand dredgers were accused of using pumps to dredge more sand than allowed.

The sand price has climbed due to a tax rise, while sand
producers in other states have increased prices due to the shortage. A revenue department official said of the 5,000 sand spots in the state, 2,000 have been cleared by the gram panchayats for auction. Also, the government proposes to increase royalty rate (cost of licence to dredge) to about Rs300 per brass (1 brass = 100 cubic feet of sand) from the present Rs100.

As a result, against a daily sand demand of over 1,000 trucks, barely 10 come into the city, that too, from neighbouring Gujarat. Sand prices that were earlier Rs 3,000 per truck of 2.5 brass, have surged to Rs 12,000 per truck.

Hemant Shah, chairman of Ackruti City, said the only option is stone quarrying. “Sea sand is of poor quality as it has 50% silt. We believe this shortage has been purposely created because dredgers want higher prices,” he said.