To open sugar import Letter of Credit (LC), Trading Corporation of Pakistan has approached the Ministry of Finance for immediate release of pending subsidy amount of Rs 40 billion, withheld for last two years. Sources told Business Recorder on Thursday the TCP management is actively struggling to arrange funds for fourth sugar import LC and to pay back the banks, as the corporation's credit limit has already exhausted.
TCP is seeking immediate release of withheld payments from the ministry of finance, provinces and other government departments. Sources said TCP has suffered a loss of about Rs 40 billion on import of wheat, urea and sugar during the last two and half years, as following the directives of federal government, the corporation had imported expensive wheat, urea and sugar and later sold at a lower price in the domestic market to keep the prices at a reasonable level.
However, as per the assurance and commitment, the ministry of finance has not paid billions of rupees subsidies to TCP for two years, therefore, the corporation is facing massive financial difficulties. Sources said a TCP team led by General Manager Finance has also visited Islamabad for securing release of pending subsidy amount and briefing the ministry officials about the TCP's financial position.
The team requested release of outstanding amount, however, the ministry officials raised some objections over the subsidy amount and demanded audit reports, which the team submitted immediately, sources added. They said TCP is struggling for 100 percent payment of wheat, urea, cotton and sugar subsidy, which works out to around Rs 40 billion during last two years.
The corporation has requested an immediate release of Rs 10-12 billion for sugar financing. "The ministry of finance itself is facing some financial problems and has insufficient funds to make subsidy payment," sources said and added that in this critical situation, the ministry should force provinces and other departments including Utility Stores Corporation for payment to TCP, as so far provinces and USC have also withheld over Rs 25 billion.