The Ministry of Mines and Energy on Friday announced the provisional winners of its public auction to award four licenses to dredge sand on a stretch of the Mekong River clogged by a build-up of silt, which is obstructing the passage of vessels through the waterway, officials said.
The tender was announced in April, a month after Prime Minister Hun Sen announced that the Ministry of Mines and Energy would overhaul management of sand dredging in the country, which had been largely unregulated.
On Wednesday, ministry spokesman Meng Saktheara explained that the auction was part of a plan to limit dredging to licensed companies operating on approved areas of the river.
“The bidding was the first phase of the ministry’s push to ensure all sand-dredging companies are licensed,” he said, adding that out of 40 companies that initially expressed interest, 19 firms submitted a total of 30 bids.
On Friday, Dith Tina, another spokesman for the ministry, said a review of the companies would be carried out by the Finance Ministry, with provisional winners announced before licenses are officially awarded next week.
Last month, the Ministry of Mines and Energy imposed a price ceiling on river-dredged sand of $3.30 per cubic meter out of concern that competitive bidding at ministry-sponsored auctions was inflating prices and dragging on the construction industry.
A minimum tax per cubic meter sold at auction was also set at $0.40, leaving companies free to outbid each other—inflating tax revenues for the government. Mr. Tina said bids were prioritized according how much tax companies were prepared to pay. If they could not afford the promised cut, he said their license would be revoked.
“If they need to sell for more than $3.30, the ministry will withdraw their licenses and will announce a public auction again,” he said.
The winner of the Lot No. 1 bid, Chin Ling Construction, offered to pay a tax of $1.92 per cubic meter—more than half the selling price. Lots No. 2 and 3 were provisionally awarded to Tan Kim Eng Co. Ltd. and Khmer Anusa Cooperation, which promised to pay the government $1.75 and $1.60 per cubic meter, respectively.
There was only a single bid on the fourth lot, Tan Kim Eng Co. Ltd., which offered $1.45 per cubic meter. Mr. Tina said other companies bidding for the lot had filled in applications incorrectly.
Tan Kim Huot, general manager of The Tan Kim Eng company, said his company was pleased with the process.
“This bidding was transparent, when compared to the past,” he said. “In the past, we had to bid through the Ministry of Water Resources and saw cheating and extremely high taxes.”