The Enforcement Directorate (ED) has forwarded a report to the Tamil Nadu Director General of Police highlighting suspected collusion between state officials and private contractors who own excavators in an alleged sand mining scandal worth ₹4,730 crore. The agency also indicated that the state government did not take corrective action against the illegal activities, which purportedly led to significant financial losses for the government.
In a recent communication sent under Section 66(2) of the Prevention of Money Laundering Act (PMLA), the central agency detailed findings from a nine-month investigation. They estimated that approximately 23.64 lakh units (66.21 lakh cubic meters) of sand were unlawfully extracted between 2020 and 2023.
According to the ED, private contractors with excavator machinery conducted unauthorized sand mining in areas adjacent to those officially leased by the Public Works Department (PWD). At four specific quarries, these contractors mined sand at rates exceeding the permitted quantities by 10-30 times. Despite government permits covering only 4.9 hectares, mining activities were observed across 105 hectares, encompassing adjacent areas. Violations related to excavation depth were also documented.
The ED’s dossier further stated that while contracts were issued for approximately 190 hectares across 28 sites in five districts, the actual mined area amounted to an estimated 987 hectares. This calculation was based on a technical analysis conducted by Terraqua UAV Solutions, a firm associated with IIT-Kanpur, which utilized advanced technologies such as high-resolution satellite imagery, drone footage, LIDAR data, and bathymetric surveys to assess the extent of excessive mining.
Overall, the ED’s investigation underscores alleged irregularities in the sand mining sector in Tamil Nadu, implicating collusion between officials and contractors and significant financial repercussions for the state exchequer.
The ED has further substantiated instances of excessive mining by examining GPS coordinates from 273 excavator machines sold by M/s Kobelco and JCB to 16 customers in Tamil Nadu, which were utilized for sand mining activities. Analysis of geolocation data revealed that multiple machines were simultaneously extracting sand from a single site, contrary to Tamil Nadu government regulations which permit only two machines per quarry at any given time. Additionally, the ED scrutinized the operational hours, idling periods, and fuel consumption of these machines to bolster its findings. In its correspondence, the ED also provided a list of four companies that have been awarded contracts for sand quarrying and transportation to depots.
ED ‘s Focus on Tamil Nadu Sand Mining Scandal
The Enforcement Directorate (ED) has accused contractors of accumulating substantial illicit wealth through illegal sand mining activities in Tamil Nadu. Alongside identifying customers who purchased excavator machines from two specific companies in the state, the ED asserted that apart from causing financial losses to the government, the rampant illegal mining has facilitated the accumulation of significant unlawful wealth by these contractors.
In connection with this case, the ED has provisionally attached assets valued at ₹130 crore, including 209 sand excavators valued at ₹128.34 crore. Additionally, deposits totaling ₹2.25 crore across 35 bank accounts linked to individuals such as Shanmugam Ramachandran, Karuppaiah Rethinam, Pannerselvam Karikalan, and others allegedly involved, have been seized.
Furthermore, on 25 April 2024, district collectors from Ariyalur, Karur, Thanjavur, Tiruchy, and Vellore appeared before the ED following summonses for questioning.
(With Inputs From TNIE)
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