The Economic Co-ordination Committee (ECC) of the Cabinet is to quiz the Ministries of Commerce and Industries for their reported involvement in cancellation of sugar import tenders, which ultimately benefited the sugar cartel, sources told Business Recorder.
The responsible officials of both ministries have sought help of Trading Corporation of Pakistan (TCP) Chairman Saeed Khan to deal with this extraordinary situation. "Both ministries will submit a detailed report to the ECC, explaining circumstances/justification for cancellation of the tenders for import of sugar by TCP against the decision of the ECC," sources added.
On Tuesday, Saeed Khan was seen in the office of Industries Secretary Shahab Khwaja, in the presence of sugar mills representatives, the main purpose of which was to chalk out a joint strategy to clear the apprehensions of the ECC, especially of Shaukat Tarin, Advisor to Prime Minister on Finance and Economic Affairs.
Sources said that in the previous meeting of the ECC, main concerns of the participants were rising sugar prices. TCP has been directed to offload appropriate quantities of their stocks of sugar in the open market to bring down the rising prices and maintain a strategic reserve for this purpose.
Tarin, who presided over the ECC meeting on June 15, 2009, had directed SBP to take urgent action to ensure that sugar mills start releasing their stocks in the market immediately. Sources said the decision was taken in the backdrop of post-budget press briefings, which had extensively reviewed key indicators.
The ECC had expressed satisfaction over the prices. However, increase in sugar prices was viewed with extreme concern, and action for release of stocks held by the millers was urged. According to sources, ECC members were apprised that the government had concrete information of hoarding and cartelisation by sugar millers and immediate action was required against them.
Most of the sugar millers have connections with politicians, in both from treasury and opposition benches, which is why no action had been initiated against them previously, said one of the officials in the ECC meeting. Sources said that PSMA has been using these connections to influence the government so that they could offload their sugar stocks at higher prices.
For this purpose, millers are using the officials of the Ministry of Commerce and Ministry of Industries who, allegedly, have ''experience'' in supporting such cartels, said one official in Industries. According to the official, the government has not yet decided to purchase sugar from local industry despite hectic manoeuvring by the sugar cartel.
SBP has also been directed to expedite opening of Letters of Credit (LCs) for import of sugar. The Ministry of Industries and the provincial governments were directed to make serious efforts to regulate the supply of sugar in order to stabilise its price in the open market through effective check on hoarding, but no concrete steps have been taken so far for the release of sugar from the mills and stockists.
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