Way back in September 2011, the Vigilance and Enforcement wing of the general administration department had submitted a report to the State government.
According to the report, a major racket is flourishing in the illegal sand mining business. On behalf of politicians, white ration card holders are turning into benamis for this illegal trade. But the state government neither reacted nor acted on the report.
A vigilance official stated: "Now, after the sand mining issue was dragged to the AP high court, the state has directed us to probe the matter and informed us that a high-level meeting would be held in a day or two."
The probe by the vigilance officials was triggered by a complaint over irregularities in the sand mining auction. The probe led the sleuths to major irregularities in the sand mining business.
The officials also discovered that there was a well-established racket to stall the government from holding the sand auctions.
"The white ration card holders were made to take part in the auctions, end up as the highest bidder but not pay the bid amount. This way, they can ensure that the sand auctions are postponed so that the coterie can carry out illegal sand mining without any problem. Apparently, it would take at least six months for a second auction to be held once the first one is foiled by the highest bidder by not paying up the bid amount," said the sources.
According to the vigilance report, one Jala China Nageshwara Rao, a white card holder of Ghaniyathkur village, participated in the sand auction for a reach in his village situated on the left bank of River Krishna.
For the four hectares reach, the joint collector of Krishna district fixed the minimum bidding price as Rs 2 crore and the EMD was Rs 50 lakh for one year lease.
The auction for the sand mining was conducted on March 21, 2011 and Jala China Nageshwara Rao quoted Rs 45.45 crore for getting the bid after depositing Rs 50 lakh EMD.
Since it was the highest amount, Nageshwara Rao was declared as the successful bidder and asked to deposit 1/4th of the bid amount immediately. But the successful bidder did not pay the amount and his EMD amount was confiscated.
When the auction for the same reach was conducted after two months in June 2011, another benami bidder SK Subba Rao of Khammam district bid Rs 39 crore and he also did not pay the bid amount to the state government but forfeited the EMD amount.
"Our inquiries revealed that the first bidder Nageshwara Rao is an agriculture labourer and his family holds a white card. His wife is an Anganwadi teacher and the income of the family is below Rs 36,000 per annum," an official of V&E said.
On further enquiry, it turned out many of the successful auction bidders were white ration card holders.
In its September 2011 report, the V&E wing recommended that the Mines and Geology department verify the financial status of the person and also insist that the bidder should possess a PAN card with three years tax filings. It also recommended that the commercial tax department should collect VAT (five per cent) on the bid amount from the successful bidder before entering into the agreement. But for some strange reasons, the state did not act on the September 2011 report of the vigilance authorities.