Indonesia banned exports of concreting sand last month citing environmental concerns and fears that exports would shrink Indonesia's borders.

But Minister of National Development Mah Bow Tan told Parliament that the claims were not justified, and that the price of the exports was supposed to factor in environmental degradation.

"Based on what we know, the Indonesian sand suppliers who are licensed by the Indonesian government are obliged to plow some of their proceeds ... into environmental reconstruction, and that is built into the price of the sand," he said.

Indonesia is the main exporter of sand to Singapore - a resource poor city-state. The Indonesian ban on Jan. 23 sent shares in construction companies plummeting amid speculation they would have to import concrete sand from more expensive sources.

Mah also said it was regrettable that Indonesia did not take up Singapore's offers to assist in addressing the environmental concerns before imposing the ban.

Foreign Minister George Yeo also disputed Indonesia's claims the ban was imposed to protect the sprawling archipelago's national borders.

"It is not possible for Indonesia's export of land sand to affect its maritime boundaries," said Yeo in the same Parliament session.

"According to our contractors who imported the land sand from Indonesia, the sources of their Indonesian suppliers were from inland locations away from the border islands of Indonesia," Yeo said.

The city-state's building authority on Jan. 31 said it would release concreting sand from its stockpile to make up for the shortfalls caused by the ban.

Mah said Monday that sand from alternative sources was expected to be more expensive due to higher transportation costs, and said it would only increase the overall cost of project development by a "manageable" 1-3 percent.

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