The government on Monday decided to continue with the import of sugar through the much-maligned Trading Corporation of Pakistan after inconclusive talks between the private sector and the ECC-nominated special committee and senior officials. This was the crux of the talks at the special committee meeting presided over by Minister for Industries and Production Mir Hazar Khan Bijarani who was not ready to talk to media stationed for hours outside the committee room in the ministry.
The key decision taken by the committee was to increase price of sugar by Rs 10 per kg at the USC outlets taking the price to Rs 55 per kg from existing Rs 45 per kg. The committee also decided to recommend to the ECC to exempt imported sugar from 25 percent Regulatory Duty and General Sales Tax (GST) to encourage private sector. The government will also extend bridge financing to the TCP to supply sugar to provinces and USC.
According to the Terms of Reference (ToRs) of the committee set up by the ECC was: (i) to review the overall stock position of sugar with TCP, as well as private sector and its availability during Ramazan and up to December 2010; (ii) to take measures for import of sugar on fast track basis by also involving private sector and procurement on Government to Government basis; (iii) to ensure the availability of requisite funds to TCP for import of sugar; (iv) to ensure that the provincial governments play their due role to ensure uninterrupted supply of sugar at reasonable rates; (v) to fix the rate of sale of sugar through USC outlets in the light of the Cabinet decision of July 14, 2010; and (vii) to evolve an effective mechanism for distribution of sugar with the help of provincial governments, especially during Ramazan.
"It was decided that TCP will complete the tendering process for import of remaining 375,000 tons of white sugar on schedule. Further to ensure ample supplies in the market and to defeat hoarding and speculation 100,000 tons of TCP imported sugar will be offloaded in the open market at import price through provincial mechanisms to supplement domestic sugar stocks immediately," says an official statement.
Sugar suppliers from across the country as well as from abroad expressed concerns about the lack of knowledge of the government team assigned the responsibility. They told this correspondent that the government team also lacked clear direction as it appeared unsure whether to involve the private sector in imports or not. The representatives of different sugar companies were given only 15 minutes to present their proposals. "What a country Pakistan is, the officials invited us for talks but there were no talks," commented one foreign supplier from the UK.
"TCP will do its best to achieve balance quantities at the earliest. PPRA exemption will be applied to overcome emergency situation through tenders on July 31 and August 7, 2010," said TCP Chairman Anjum Bashir while talking to Business Recorder.
Interestingly, the government had provided relaxation for a period of two months with regard to applicability of PPRA Rules, 2004, thus facilitating TCP to expedite procurement process, but even then the corporation failed to meet the target. The ECC had directed TCP to import 1.2 million MT of sugar. In order to expedite the import process, the Prime Minister had granted one-time waiver from Public Procurement Regulatory Authority (PPRA) Rules 2004, for the import of 0.75 million tons.
This waiver, however, could not help as due to fluctuation in the international market the second lowest bidders refused to match the lowest bid. So far TCP has floated tenders for 2,100,000 MT against which tenders for only 825,000 MT could be awarded.
Minister for Law, Babar Awan and Minister for Ports and Shipping, Babar Ghauri who delivered speeches against the TCP Chairman in previous meetings of the Cabinet and the ECC were not present. However, Minister for Science and Technology, Azam Swati participated in the meeting.
According to the official statement, the meeting was informed that as of July 26, 2010 total stock position was 1.1 million tons. Break-up of which is as follows: Punjab 600,000 tons, Sindh 277,000, Khyber Pakhtoonkhawa 43,000 tons and Balochistan 5000 tons while TCP had 182,000 tons.
It was agreed to supply sugar through provincial mechanisms to supplement sugar stocks immediately. In the first intervention it was decided that TCP will complete the tendering process for import of remaining 375,000 tons of white sugar on schedule. Further to ensure ample supplies in the market and to defeat hoarding and speculation 100,000 tons of TCP imported sugar will be offloaded in the open market at import price through provincial mechanisms to supplement domestic sugar stocks immediately.
The provinces will have to pay in cash as they lift the stocks from TCP well before Ramazan. The respective provincial allocations will be as follows: Punjab, 50,000; Sindh 17,000, Balochistan 8,000, Khyber Pakhtoonkhwah 20,000 tons, AJK/Northern Areas 5,000.
The committee also recommended that 0.5 million tons of raw sugar will be allowed to be imported duty-free till the 30th of November 2010 on first come first served basis. The committee decided that the USC sale price of per kg sugar will be Rs 55 during Ramazan and afterwards the price differential will be not more than Rs 10 per kg from the average market price prevailing in Islamabad, Lahore and Karachi. The committee also decided that with the completion of the current sugar import process the market forces will be allowed to prevail and the private sector would be encouraged to import sugar, the official announcement added.
The meeting was attended by the Federal Ministers for Food and Agriculture, Petroleum and Natural Resources, Minister for State for Finance and Economic Affairs, Deputy Chairman Planning Commission, Federal Secretaries for Finance, Planning and Development, Food and Agriculture and Commerce. The provinces were represented by Secretary Industries Punjab, Secretary Food Punjab, Secretary Agriculture Sindh, Secretary Food Balochistan, Cane Commissioner Punjab, Secretary Food KP, Cane Commissioner Minfa, senior representative of the State Bank of Pakistan, Chairman TCP, and Managing Director USC.