Sugar tender cancellation: bidders quoted higher than market price, National Assembly panel told

National Assembly Standing Committee on Commerce was informed on Thursday that Economic Co-ordination Committee (ECC) of the Cabinet has cancelled the tender received from the sugar mills for purchase of 200,000 tons of sugar and decided to call a fresh tender to purchase the commodity at current price of sugar in the market.
Tahir Raza Naqvi, Chairman Trading Corporation of Pakistan informed the National Assembly Standing Committee on Commerce that earlier sugar mills had quoted Rs 65 per kg price of sugar for sale to government which t was much higher than the market price of Rs 59-Rs 61 per kg and now the market price has gone down to Rs 50 per kg. Therefore, the ECC has decided to invite fresh tenders to procure the sugar.
The ECC also decided to import more 300,000 tons of urea fertiliser to meet the rabbi crop needs in the country and a total import of 1.2 million tons of urea would be completed by end December 2011, Tahir Raza Naqvi, stated. He informed the Committee that ECC has also took notice of sale of urea fertiliser at higher price and constituted a committee and asked for submitting report in next meeting.
The ECC was informed on the issue of purchase of 200,000 tons of sugar from local sugar mills, the Trading Corporation of Pakistan officials informed the committee that TCP on the directive of ECC had floated tender for purchase of 200,000 tons of sugar and 27 responsive sugar mills have quoted Rs 65 to Rs 66 per kilogram price against their supplies.
He said that the TCP has a stock of sugar 117000 tons which would be sufficient for next four months as the Utility Stores Corporation is picking up sugar at 30,000 to 50,000 tons per month. The TCP official maintained that current stock of sugar would be sufficient till the next crop of sugar.
On the issue of Urea import, TCP Chairman informed that ECC has decided to import a further 300,000 toms of urea under Saudi Development Fund facility. The ECC had already approved import of 700,000 tons of urea and 200,000 tons of urea in it's last few meetings and with the addition of 300,000 additional urea import decision, total urea import volume to go up to 1.2 million tons for Rabbi crop 2011-12.
Explaining the reasons for import of additional 300,000 tons of urea, he said that ECC was informed that it was decided that urea plants to be provided gas for 15 days for local production of gas and government was not able to provide gas to these fertiliser units and exultantly, the country has left with no option but to import additional 300,000 tons of additional urea. He informed the Committee that two major urea fertiliser units have closed down due to non-availability of gas.
The committee members opined that the government rates in tender are Rs 65 per kg where as market rates are Rs 50-52 per kg. In view of current power and gas crisis, government should devise some remedial measures. Some committee members further questioned as to why raw sugar was not imported and maintained by TCP when the government repeatedly approved this proposal.