TUESDAY OCTOBER 25: Urea import destination: ECC decision amended for plausible reasons?

ISLAMABAD: An Economic Co-ordination Committee (ECC) decision with regard to port of discharge was amended with a view to avoiding bunching of vessels and ensuring quick dispersal of imported commodity to respective consignees.
Official documents obtained from the Ministry of Industries (MoI) show that the ECC in its meeting on August 23, 2011 took a serious note of violation, by the TCP, of its earlier decision in respect of urea import through Gwadar port, and directed the Secretary of the Ministry of Ports and Shipping to thoroughly investigate the matter and submit a report to the ECC.
The ECC, in a meeting in December 2008 had decided that wheat, fertiliser and coal should be imported through Gwadar port. The decision was again reiterated by the ECC in its meeting on April 26, 2011 after considering the costs and benefits of import through Gwadar.
Subsequently, the TCP issued a tender notice on June 9, 2011 for the purchase of 50,000 tons of urea and C&F through Karachi, Port Bin Qasim and Gwadar ports. On June 17, 2011, Multicommerce LLC USA was selected as the lowest bidder for 50,000 tons plus minus 10 percent of urea for supply at either of the three ports. The supplier shipped the urea consignment in two vessels, of 25,000 tons each, and the TCP directed it that Port Bin Qasim would be the discharge port for the vessels.
Vessel named mv 'HAI YU' arrived at Port Bin Qasim with 26,000 tons of urea on July 31, 2011 and sailed out on August 15, 2011 after discharging its cargo. Another vessel named mv 'IOANTHI', arrived at the same port with 19,506 tons of urea on 23 August 2011. Total quantity arrived at Port Bin Qasim was 45,706 tons of urea. After opening of tender, TCP awarded another supplier, Transammonia AG, Switzerland, on the basis of price matching with the lowest tender for the quantity of 50,000 tons urea. The supplier brought the cargo of 45,550 in one vessel named mv 'PU TUO HAI'.
The vessel arrived at Gwadar port on July 24, 2011 and sailed out on August 7, 2011. The whole of the urea that arrived at Gwadar port was dispatched for distribution. Gwadar port is currently offering free storage facilities of bagged bulk cargo approximating up to 250,000 tons to the GoP. In the recent past, over 140,000 tons of urea was stored at Gwadar port free of cost, unlike any other port in Pakistan.
According to the TCP, the ECC on May 7, 2011 decided, in principle, for import of urea for Kharif season 2011 and constituted a committee headed by the Governor of State Bank of Pakistan (SBP). The ECC approved the committee's decision to persuade Saudi Basic Industries Corporation (SABIC) for supply by July and, in case they do not agree, TCP should float a gallop tender for 50,000 tons.
TCP claims that it had informed the Finance Minister that SABIC will supply 50,000 tons of urea by July, and sought permission for a gallop tender for this quantity. The Finance Minister was requested to approve, among others, the following, in his capacity of Chairman ECC: "allow import of 50,000 tons (as assessed by the Governor of SBP) through gallop tender against cash from the Commodity Finance Operation fund facility available with TCP involving payment of subsidy of Rs 1.5 billion by the Finance Division. This may be imported at Karachi port for early delivery at final destination".
The TCP further argues that this recommendation was made only to avoid bunching of ships and ensuring quick discharge of urea. Finance Minister, in his capacity as Chairman ECC extended the approval. The ECC Chairman also approved further import of 50,000 tons urea from the same tender. This was directed to be imported at Gwadar. Out of this tender, import under SABIC, 100,000 tons arrived at Gwadar while 45,706 tons arrived at Karachi. The most recent tender (August for 190,000 tons) is destined for Gwadar.
The documents say that an inquiry report, prepared by Secretary, Ports and Shipping, Muhammad Saleem Khan, on the basis of a letter of TCP, does not prove that the TCP violated any decision. However, the ECC, in its meeting on October 13, 2011, dropped this item from the agenda, instead of presenting the report for discussion.