The Trading Corporation of Pakistan (TCP) has issued a detailed clarification with regard to the report in the Business Recorder's issue of August 12, 2004 captioned "TCP hoodwinked to buy Russian wheat: experts", which it alleged was "misleading and incorrect".
The clarification says: "TCP did not contravene its own specifications and terms and conditions by awarding the tender to Agrico Trade and Finance as the tender notice as well as tender terms and conditions clearly stipulated soft/medium hard white wheat US Grade 2 or better/equivalent Australian, Canadian or other origins.
This provision clearly indicated that origins other than USA, Canada and Australia (which have been the traditional sources of wheat to Pakistan) were also eligible to participate in the tender.
The government had taken a well considered decision on this account so that sourcing of wheat for import into the country is not restricted to traditional/limited sources but other origins which have equivalent wheat to offer should also be welcomed as it will not only generate competition but also make the wheat arrive early. Bidding in this tender has proved the government right.
Moreover, the Government of Pakistan will pay for this wheat from its sources, as the wheat is not being received under any aid package.
"Since wheat of Russian origin is being sourced for the first time, the Committee told the suppliers that an internationally recognised pre-shipment inspection agency appointed by the TCP will be associated with the Russian Government Department at the load port right from the sampling of wheat and testing, for the specifications laid down in the tender, to ensure that they are conducted in accordance with the international standards.
The supplier has agreed in writing to this additional condition. Wheat, which will not be in accordance with the specifications, will not be accepted.
"The tender terms and conditions stipulated that a bidder in order to participate in the tender was required to furnish, along with his bid, a bank guarantee of 2 percent or a demand draft/pay order of 1 percent of the value of goods. Agrico Trade and Finance, Switzerland submitted a pay order of US $600,000 from the internationally recognised ABN-Amro Bank for 300,000 tonnes of wheat offered by them although they were required to submit a bid bond of up to 150,000 tonnes only."
"All the successful bidders have to post performance guarantee of 5 percent of the value of goods within seven days of award. Failure to do so will render the bid bonds to be forfeited. No "fly-by-night" supplier would either post a pay order of an internationally known bank or will take the risk of posting a pay order for double the quantity of the goods required, knowing that the bid bond can be forfeited if the performance guarantee of 5 percent is not submitted within the stipulated time.
The performance guarantees of two of the four successful parties, including Agrico Trade and Finance have already been received.
"The deliveries are expected to start before the second week of September 2004 and will serve a severe blow to not only the hoarders of wheat who have caused price of atta to rise (much to the discomfort of the common man), but also to those suppliers who have been jolted by the award of tender of wheat to a new origin, which is much cheaper than the other sources and whose delivery period is also short.
"It may be further clarified that traditionally the wheat from USA, Australia and Canada was sold after blending with the locally grown wheat. Same treatment will be given to the Russian wheat if required and deemed necessary.
Some responsible and known flour millers who met TCP chairman on Thursday, (August 12) expressed that they would have no problem in milling the Russian wheat, as it is as hard as the local wheat, and also that the wheat is not going to effect their equipment in any manner.
They also informed that 70 percent of their installed machinery for flour milling, throughout Pakistan, is of Russian make."-PR
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