The Trading Corporation of Pakistan (TCP) has received the lowest bid of $723.20 per ton for 50,000 tons of white sugar against its first tender for 150,000 tons, but the accompanying bid bond has been established in the shape of a Standby Letter of Credit (SBLC) by Dubai Bank Kenya Ltd in Nairobi for $750,000.
However, as per tender clause 9 (bid bond), the issuing bank is not a prime bank while this Bid Bond is also not confirmed as required by tender Annexure-IV, sources told Business Recorder.
Sources said that TCP's General Manager (Finance) and other officials would scrutinise the respective Bid Bonds on Monday, after which final decision on issuance of the official Letter of Acceptance would be taken by a committee in TCP.
Sources said that seven parties had participated in the tender, out of which, six deposited their bid bonds. The quantities submitted to TCP against the Tender No Imp/Sugar/9-14/2009 dated 31st December 2009 for 150,000 tons white sugar, that opened on Saturday, February 6, 2010 were: (i) World Base Trading FZE Dubai/Singapore offered 50,000 tons from Brazil at $723.20 (ii) Cargill International SA Geneva offered 100,000 tons optional origin at $807 (iii) Al Khaleej Sugar Co (LLC) Dubai offered 150,000 tons optional origin at $823.50 (iv) Wellington Marketing FZE Dubai offered 50,000 tons optional origin at $834 (v) Sucden Middle East Dubai offered 50,000 tons optional origin at $839.70 (vi) Louis Dreyfus Commodities Suisse SA Geneva offered 50,000 tons at $840.21 with condition on packing and 16,000 tons min/max afloat vessel at $848.64 and 20,000 tons at $875.83 as per tender terms. The seventh participant Vitol SA Geneva regretted.
"We will award contract only to those firms whose offers are lowest; besides they fulfil all the terms and conditions mentioned in the bid documents" said TCP Chairman Saeed Ahmad Khan while talking to Business Recorder.
He said that no response had been received from Philippines Veterens Investment and Development Corporation (PHIVIDEC) which had offered to strike a sugar-rice barter deal on government to government basis. "We have clearly conveyed to PHIVIDEC that TCP as a public sector organisation can do business only with the government. If the firm is from the private sector, it has to participate in the tenders."
He said that the chief of Dubai Export Development Corporation (DEDC) had appreciated Pakistan government for giving it an opportunity to supply sugar on government to government basis. It may be recalled that on February 2, 2010, TCP Chairman had officially invited the Chief Executive Officer of DEDC to visit Islamabad to discuss the terms/conditions of the agreement and price of the offer on deferred payment. Its delegation is likely to visit Pakistan this week.
Pakistan has to import 1.2 million tons white sugar, most probably through TCP, as the country's private sector especially Pakistan Sugar Mills Association (PSMA) is unwilling to enter into import business because they fear that the government can intervene in the market.
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