Expediting payment to sugar mills: Finance Ministry to convene stakeholders' meeting

Finance Ministry has decided to convene a meeting of stakeholders within a couple of days to expedite payment to sugar mills amid wild accusations of delaying tactics against the Trade Corporation of Pakistan (TCP), a state-run organisation, official sources told it Business Recorder.
Finance Minister Dr Abdul Hafeez Shaikh is also furious over the TCP for allegedly using delaying tactics in payment to mills, as growers are the main affectees of this situation. TCP has procured 3,78,000 tons sugar from mills on the directives of Federal Government at Rs46.25 per kg, but payment of Rs17.5 billion is still in the doldrums because of TCP's intended delays.
On January 20, ECC approved further procurement of 100,000 tons sugar from mills not above Rs50 per kg. Ministry of Industries has proposed to the government to procure at least 0.625 million tons sugar from mills. Chairman TCP, Tahir Raza Naqvi, has categorically denied the allegation, saying that PSMA is basically exerting pressure on the Corporation for payment of the purchased sugar mills without following codal formalities.
When contacted Secretary Finance Dr Waqar Masood confirmed that a meeting has been called to resolve this issue immediately so that payments may be expedited, which will ultimately go the growers.
An official statement issued by the Finance Ministry after the meeting of Economic Co-ordination Committee (ECC) of the Cabinet on January 20, 2012 under the chairmanship of Finance Minister, Dr Abdul Hafeez Shaikh, quoted Chairman TCP as briefing the ECC that payment to eight mills has already been made whereas the payment to other mills will be cleared by the end of current month. Chairman PSMA, Javed Kayani, when contacted to ascertain the status of payments against the claims of TCP Chairman in ECC briefing to have cleared the payments to sugar mills, lamented that so far not a single penny has been paid to any sugar mill. When this question was raised with TCP Chairman, he replied that he actually informed the ECC that the documents of eight mills have been completed and payment will be made to them in a couple of days.
Official sources told Business Recorder that Finance Minister was furious over Chairman TCP for not expediting payment to the mills as this payment would go to the sugarcane growers. "Abdul Hafeez Sheikh directed Chairman TCP to make the payment to all the millers expediently and make sure to avoid any lapse in it, since the payments ultimately goes to the farmers," the official statement said. PSMA is of the view that objective of the whole exercise was to facilitate payments to growers.
"We have been running from pillar to post for the last three months asking for disposal of surplus stocks although Federal Government initiated the process in good faith to build strategic reserves and to help the growers to get timely payments but unfortunately the entire process is turning out to be an exercise in futility as Rs17.5 billion is stuck with TCP," said Kayani.
He said PSMA does not understand what crime the sugar industry has committed by offering the lowest price and yet being given the worst ever treatment.
To a question, Chairman TCP stated that payment would be made after due process, which includes inspection of the stocks, laboratory tests and other codal formalities. So far all mills have been visited/inspected by the surveyors out of which lab test reports of 10 mills have been received from Pakistan Standard Quality Control Authority (PSQCA) in TCP and payment to these mills is under process.
"PSQCA is not working under my control. When PSQCA will complete tests of the samples, I can go forward," he maintained. On January 22, 2012, PSMA also wrote a letter to Finance Minister, Dr Abdul Hafeez Shaikh, apprising him that crushing season can be delayed due to non payment to the growers and TCP will be responsible for any eventuality. "I have written a letter to Finance Minister in which all the facts have been mentioned so that effective measures should be taken to pay the growers immediately," said, Javed Kayani.
According to the letter, PSMA has also requested the Finance Minister to procure additional quantity of 0.5 million tons of sugar from millers to clear payments of growers.
Answering to another question, he acknowledged that unfortunately there is an impression that TCP is dominated by corrupt officials and perhaps there will be some truth, but he is running all the matters fairly and reviewing sugar procurement every day.
"The treatment being meted out by TCP is highly deplorable and loud claims made at ECC are contrary to facts. We sell the same sugar everyday and produce the best quality sugar and there is no question of anything below standards. What codal formalities they are trying to observe we do not understand. Also when they import third class sugar which is sold at 5 rupees less than the local market which nobody wants to buy what codal formalities are observed at that time. We know these are all lame excuses for face saving and to keep the payments in limbo," he added.