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Another hitch for Amaravati funding ?


Chief minister Naidu’s attempt to raise funds for the construction of capital from the proceeds of red sander sales suffered a setback . The international response for the auction of red sander is far below par. The response from the buyers was poor despite huge campaign taken up the officials from the forest department. State government hoped to get huge and sustained supply money from the sales of confiscated red sanders from the smugglers and use the money for loan waiver and later divert the funds for the construction of the Amaravati. But, what is happening at the ground level is disappointing. They buyers who used to procure the precious wood from the smugglers at cheaper rated are not coming forward to buy it in the auctions of government of Andhra Pradesh, affecting the fund flow to the government. Red Sanders, the government thought, was a gold mine , in supplying much needed funds for the state.
In the last week auction, the forest department hoped to mobilize least Rs. 750-800 crore. Much to disappointment of officials, only eight international bidders turned up in the three-day e-tender-cum-e-auction, which concluded last Friday. Only eight lots out of 106 were quoted by the bidders. The total quantum of red sander kept for auction was 2,868 mts. The department fixed the starting price at Rs. 21 lakh per tonne for C grade, Rs. 38 lakh for B grade and Rs. 52 lakh for A grade.

This poor response was discouraging because, state government has prepared a massive plan to raise about Rs 6000 to 10,00 crore per annum by harvesting the red sanders annually. It wrote to the CITEs to declassify the plant from the list of endangered species so that it could it self cut some trees and plant equal number of saplings to replenish the forest with red sanders. So, the there won’t be any loss to the ecology of Seshachalam project. The plan was chalked out that they would huge market for the Red Sanders. But, in reality, the demanded disappeared from the second auction itself.

The first auction conducted last November 2014 fetched about Rs 900 crore ignited hopes in the government that it would be a perennial source of revenue for the state. In the first phase of etender-cum-auction 4160 MTs of red sanders was sold. The second phase of auction conducted in June 2015 did not expected response. Out of 3500 MT set apart for auction only 830 MT was procured by the buyers 178 crore while government hoped to get Rs 1000 crore. The international response was miserably poor despite the government efforts to market to Red Sanders globally. The officials of the department toured China and Japan, met dealers and conducted road-shows spending huge money. Third phase figures would available in a couple of days.

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