50,000 tons of urea import: TCP accepts $2.17 per ton higher price by second bidder

Declaring the first lowest bid non-responsive, the Trading Corporation of Pakistan (TCP) Wednesday awarded 50,000 tons of urea import contract to the second lowest bidder, which quoted $2.17 per ton higher price compared to first lowest. This will inflict an additional burden of $108,000 on national kitty, sources in the business said.
TCP has awarded contract to the second lowest bidder, which offered $337.17 per ton rate as compared to the first lowest bid of $335 per ton, they added. Whereas, TCP said the first lowest bidder's offer was conditional and only for Gwadar port, therefore the corporation has declared it non-responsive being nonconforming to the tender terms and conditions and accordingly decided to award the tender to the second lowest bidder.
M/s Toepfer International - the lowest bidder has also officially registered protest against TCP and warned of legal action. On Wednesday (June 5, 2013), TCP opened urea tender for the import of 50,000 tons. Overall some 15 international bidders/suppliers participated in the urea tender. The prices quoted by bidders in the tender ranged from $335 per ton to $371 per ton Cost and Freight (C&F).
This urea import tender was issued last month, following the directives of the Economic Co-ordination Committee of the Cabinet, to avoid any shortage in the domestic market as domestic urea production is on decline due to gas curtailment to urea plants. The lowest bid was received from M/s Toepfer International, which offered to supply 50,000 tons of urea at a price of $335 per ton through Gwadar port. As per the terms and conditions, the lowest bidder also deposited a bid bond of $570,000.
The second lowest bid was $337.17 per ton submitted by M/s Trammo for the supply of 50,000 tons through all three ports -Gwadar, Karachi and Bin Qasim. However, the tender award committee denied awarding contract to the lowest bidder and declared it non-responsive as they believed that its bid was conditional and was only for Gwadar port.
The TCP tender award committee meeting held Wednesday was chaired by Mrs Rubina Athar, joint secretary ministry of Commerce and ex-officio Director TCP and attended by Maqsood Jahangir Director Finance TCP, Manzoor Ali Sheikh Director Procurement and Planning and Chaudhry Mubarak Ali Director Logistics and Projects, representatives of ministry of industries and Transparency International.
The committee reviewed all the bids and decided to award the tender to M/s Trammo at a price of $337.17 per ton for the import of 50,000 tons of urea. The offer was for all three ports. Sources said TCP itself invited bids in US dollar per ton on C&F basis separately for Gwadar and Karachi or Port Qasim and following the TCP's tender requirement M/s Toepfer International submitted bid for Gwadar port. In addition, urea tender terms and conditions also empower the state-run grain trader to divert shipment to specific port in Pakistan.
"The port of arrival/discharge will be any port in Pakistan as designated by TCP. TCP reserves the right to divert the vessel to any specific port in Pakistan," according to TCP tender document clause 3-F. Sources said that TCP's this decision will put an additional cost of $2.17 per ton or cumulatively $108,500 (on import of 50,000 tons) on the national kitty, besides higher subsidy on the imported urea.
In addition, the first lowest bidder has also expressed its concern over this deal and urged TCP to cancel the deal and a written complaint, a copy of which available with Business Recorder, has been sent by the Pacific Exim - the local agent of M/s Toepfer International to TCP, secretary ministry of commerce, director finance TCP, general manager imports TCP and other officials.
Pacific Exim, on behalf of M/s Toepfer, has shown displeasure that TCP has awarded the tender to M/s Trammo at $337.17 per ton against its lowest bid of $335 per ton. "We urge TCP in the interest of justice, government and people of Pakistan to cancel this award and allow our esteemed organisation, which are the lowest in tender to supply this cargo," the letter said.
The lowest bidder has drawn attention of TCP towards CL: 4-A of the tender document (quoted: The price shall be quoted in US dollar per metric ton on C&F basis separately for Gwadar, Karachi or Port Qasim (Free Out). The lowest bidder has also alleged that TCP is creating a new trend in the tender award, whereby an impression is being created that underhand dealings were carried out in order to have the award to the second bidder at $2.17 per ton higher than the lowest.
"We reserve our right to legal recourse in the event Trading Corporation of Pakistan failed to undo this wrongful step," it concluded. TCP official rejecting the allegations said the deal has been finalised in a transparent manner. He said the representatives of the ministry of industries, ministry of commerce and transparency international were also present in the meeting. He said there is only one reason of decline and that is conditional supply through Gwadar port only.
Meanwhile, M/s Amber offered to supply 50,000 tons of urea at $337.74 per ton, M/s Quantum bid price was $337.75 per ton, M/S CHS EUROPE agreed to supply at $337.88 per ton, M/S Liven bid price was $338 per ton, DREYMOOR Fertiliser quoted rate of $338.90 per ton and Swiss Spore offer price was $341.90 per ton. M/s Gavilon bid price was $344.72 per ton, Samsung offer was $347.00 per ton, M/s M Commerce quoted $349.00 per ton, Agri Commodities submitted a bid for 50,000 tons with a rate of $352.70 per ton and M/S Indargo bid price $353.80 per ton. In addition, M/s Koch Fertiliser quoted $355.10 per ton and M/s Mid Gulf offered a price of $363.00 for Gwadar and $371.00 for Karachi and Port Qasim.