Andhra Pradesh’s red sanders e-auction begins, state expects R1,500-cr revenue

By: |
Hyderabad | November 26, 2014 12:12 AM

The state has placed 4,160 mt of red sanders logs of different grades for sale in phase I. The e-tender-cum-auction began on Monday and will continue till Dec 1. About 14.5 tonne of logs at Tirupati depot are part of the global auction

The much-awaited sale of red sanders by the Andhra Pradesh government commenced with bidders quoting R261 crore for a volume of 830 tonne on the first day of auction on Monday. The state began the e-auction of red sanders logs through global tenders using the central government’s Metal State Trading Corporation (MSTC) e-commerce platform.

The government has placed 4,160 million tonne (mt) of red sanders logs of different grades for sale in the first phase. The e-tender-cum-e-auction for sale and export of 4,160 mt started on Monday and will continue till December 1. About 14.5 tonne of logs of the Tirupati depot are part of the global auction.

In fact, AP is the only state going for e-auction, partly to act as a cover for its farm loan waiver promise. Though the expected revenues are yet to be ascertained, the government is estimating a jump from its earlier auctions in 2006 and 2008. According to state government officials, sale proceeds may fetch revenues of up to R1,500 crore. However, 30% of the proceeds will go for protection of the natural red sander forest and for plantation on government lands.

Giving the details, PK Jha, additional principal chief conservator of forests, said the A grade got R1.95 crore per metric tonne, B grade got from R56.65 lakh to R155.22 lakh and C grade fetched R16.51 lakh to R35.16 lakh per tonne. After the completion of the e-tender-cum-e-auction on December 1, MSTC is expected to forward the list of lots which has fetched a price higher than the reserve price to the principal conservator of forests and then to the government.

The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) had given one-time permission to export 11,806 mt of confiscated red sanders from India in 2012, which was renewed in 2013 and 2014. Based on the CITES permission, Director General of Foreign Trade (DGFT), ministry of commerce, has given notification amending the Exim policy, thereby granting permission to the Andhra Pradesh government to sell and export 8584 mt in log form.

A total of 177 lots are being put up for e-auction. About 30 lots were put on auction from the Tirupati depot. Jha said officers have been put on alert in eight courts, including the Supreme Court and high courts of Hyderabad, Delhi, Bangalore and Chennai, to avert any legal hurdles as vested interests representing the red sanders smuggling industry are trying to stop the sale. Post the auction, the incidence of red sanders smuggling is expected to come down, he added.

The proposed sale of red sanders involves interaction with foreign buyers to get higher revenue, he said. A team of officials visited Beijing, Xian You and Tokyo to conduct road shows and pre-bid meetings in these cities as they are the major markets for red sanders wood.

Jha had earlier said that about 415 prospective buyers had visited the red sanders depots. “This includes 275 Indian visitors and 140 foreign buyers, of which 109 were from China, 16 from Japan, 4 from Singapore and 10 from other countries,” he said.

Red sanders is endemic to forests across Chittoor, Kadappa, Nellore, Prakasam and Kurnool in Andhra Pradesh with a spread of 4.67 lakh hectares. Red sanders was classified as endangered in 1997 at International Union for  Conservation of Nature’s red list.

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