BENGALURU: The Karnataka govt's decision to import 1 lakh metric tonnes of natural sand from Malaysia to address the severe scarcity of river sand, way back in 2017-18, has now come back to haunt it. The Krishnapatnam Port Company (KPCL), owned by Adani Group, has issued legal notices, demanding compensation of Rs 76 crore towards uncleared stocks worth Rs 10 crore.
However, the state govt has obtained a stay order over the notice and has decided to dispose of the unsold imported sand lying at KPCL by inviting open bids.
To resolve the acute shortage of river sand across Karnataka in 2017-18, the state govt imported 1,03,872 MT of sand from Malaysia through Mysore Sales International (MSIL) under the commerce and industries department. The Malaysian sand was then imported by a consortium of three companies — KPCL, Poseidon FZE, and Dhanveer Port -- according to senior officials of MSIL. Yet another company, Oshine Agencies, was entrusted with the task of transporting the imported sand from the port in Andhra Pradesh to Karnataka for retail sales.
However, by then, Covid broke. Also, there was hardly any demand for the imported river sand, which was costlier than the locally available M-sand. "We could sell only 14,759 MT of sand during that time. While we invested Rs 14.5 crore for importing the sand, we got back only Rs 4 crore from the sales. We are yet to get back Rs 10 crore by disposing of the remaining 89,113 MT of sand lying at the KPCL," explained a senior MSIL official.
Even as the state govt was finding ways to sell off the unsold inventory, the Adani Group took over the KPCL in 2020-21, including all the assets at the port. With no sign of the MSIL disposing of the imported sand lying waste at the port or paying the ground rent charges for occupying the port's place, the group issued legal notices to the state govt demanding compensation.
"Initially, Adani Group served us the legal notice demanding Rs 84 crore. We were surprised by the notice as the net worth of the unsold inventory was just Rs 10 crore. While we tried reaching out to other partners who inked a pact with the MSIL, there was no response. Yet, we responded to the legal notice of the Adani Group, and subsequently, they revised the dues to Rs 76 crore. But we immediately approached the court and obtained a stay over the legal notice," explained another senior official from MSIL.
When the issue was brought to his notice, industries minister MB Patil took up the issue with the chief minister, who also held the finance department, seeking guidance. Both MSIL Board and finance department advised the disposal of unsold sand with immediate effect, regardless of the profit or loss.
Senior marketing officials of MSIL told TOI that a few bidders have come forward to take the imported sand and they are hopeful of clearing the stock.
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