Pakistan Standards on sugar: government being coerced into making unlawful amendments

The federal government is being coerced into making unlawful amendments to Pakistan's standards on sugar, knowledgeable sources told Business Recorder. A Karachi-based representatives of a foreign company has very special relations with top officials of Ministry of Commerce, Office of Minister for Finance, and Prime Minister's Secretariat which can make party specific changes in tender terms, specifications and rules.
However, the incumbent TCP Chairman is not aware of this nexus, according to sources. In 2009, TCP imported about a quarter of a million tons of white sugar via open public tenders in which several International Sugar Trading companies participated competitively.
According to privileged documents viewed by Business Recorder, major international trading companies including Cargill International SA Geneva, Sucden Middle East Dubai, Agrocorp International Pte Ltd Singapore and others have all been participating in TCP's white sugar tenders unconditionally while strictly abiding by all tender terms and conditions especially the specifications as per PSQCA standards, etc.
It may be recalled that on March 2, 2009, the Ministry of Commerce specifically ordered the purchase of 25,000 MT refined sugar from Bunge SA, Geneva at $451.45/MT despite Bunge's bid allegedly being conditional and non-responsive and knowing that TCP was not empowered to give such relaxation in the legal requirements or award the contract. Subsequently, the National Assembly's Standing Committee on Commerce, headed by Engineer Khurram Dastgeer Khan concluded that the delays in the sugar import and even subsequent cancellation of TCP's sugar import tenders had caused losses of hundreds of millions of rupees to the national exchequer for which no one had been held accountable.
However, later on, the Ministry of Commerce had the conditional specifications/packing offered by Bunge SA Geneva in violation of TCP tender terms and conditions and Public Procurement Rules, 2004 condoned by ECC of the cabinet.
Subsequently, TCP's tender terms and conditions were reviewed and rationalised in consultation with Ministries of Industries, Commerce, Finance and Science & Technology and it was decided that since white/refined sugar is a compulsory item to meet Pakistan standard for refined sugar and white sugar (3rd Rev.) PS 1822-2007 (r) from January 1, 2009 ie all white/refined sugar imports must conform to this standard.
Moreover, the polypropylene bags for sugar have also been declared as a compulsory item to meet Pakistan standard for polypropylene woven sacks for packing (sugar) (1st Rev.) PS 3128-2008 (r) from January 1, 2009 ie all packing for white/refined sugar must also conform to this standard.
Business Recorder has also learned that both Pakistan Standards ie PS 1822-2007(R) and PS 3129-2008(R) were made by extensive technical committees representing all stakeholders several years ago and have also been revised several times but finally became the law of Pakistan from January 1, 2009. Moreover, PPR-2004 Rule 23.
BIDDING DOCUMENTS
-- (2) (l) states that for competitive bidding, whether open or limited, the bidding documents shall include the following, namely:
-- details of standards (if any) that are to be used in assessing the quality of goods, works or services specified.....Therefore, TCP is bound to incorporate details on the standards in the white sugar tender documents without any alterations or exceptions.
Since then, the TCP has been importing white sugar on these approved and rationalised tender terms. It now appears that the Ministry of Commerce is once again in connivance with TCP officials and a Karachi-based representative of a foreign firm want to make party specific changes in tender terms, specifications & rules in gross violation of PSQCA Act, 1996 as well as Public Procurement Rules, 2004 only to serve the vested interests of a few powerful lobbies that would like to delay and derail the white sugar import process.
In view of the rising prices of sugar locally, the ECC of the cabinet on Tuesday decided to rationalise the price of sugar to be sold through USC retail outlets by increasing it by Rs 7 per kg ie from Rs 38 per kg to Rs 45 per kg. Many analysts believe that the inordinate delay in the import of white sugar by the Ministry of Commerce will continue to cost the national exchequer heavily as even though the Federal Cabinet approved the Sugar Policy in November 04, 2009, until now, no white sugar has actually arrived in Pakistan.
The sources said, the TCP is expected to open their tenders in February 2010 amid rising International prices. This looming sugar crisis is going to worsen in the coming few months if these sugar lobbies succeed in delaying the import of white sugar.
Market stakeholders are also of the view that the concerned authorities must take notice of the above and immediately direct the TCP to finalise and issue their rationalised, transparent and approved tender terms and conditions without any further delays.