Fertiliser Import Department (FID), a subsidiary of Ministry of Food and Agriculture, has been accused of violating fertiliser procurement guidelines in relation to a fertiliser deal. Ministry of Food and Agriculture will hold a fresh inquiry to fix the responsibility and find out irregular credit of Rs 1.469 billion to M/s National Fertiliser and Marketing Limited for purchase of imported fertiliser.
During 1993-94, the FID irregularly delivered imported fertiliser on credit to a private party-National Fertiliser and Marketing Limited on 164 occasions the cost of which was worked out Rs 1.469 billion. The cost was recovered from the party after one year, resulting in increase of interest charges taken on equal amount of loans from the bank for running the state trading scheme.
Despite, clear direction to director FID Karachi in 1994, not to deliver any fertiliser to any distributing agency without advance payment, the credit was given. An internal inquiry was carried out by the department which fixed responsibility on two junior officers.
Special Public Accounts Committee (PAC) on Thursday declared the inquiry report faulty as junior officers were not invited to explain their position. Committee further directed the Additional Secretary Ministry of Food and Agriculture Khizer Hayyat to hold a fresh inquiry within 15 days.
Audit's interpretation of rules says that the cost of fertiliser was to be paid by the private party either through a letter of credit opened in favour of the audit office in a scheduled bank or through bank draft immediately on allocation of the share of fertiliser from a vessel and before getting delivery of cargo from the department. The prescribed procedure was not adopted. The amount of interest on the delayed payment at the authorised bank rate of 18 percent per annum worked out to Rs 50,898,175 which was not recovered from the party.
In another case, the director general of food placed a freight contract on a firm (M/s Riha Maritime Pvt Ltd) for shipment of 98,000 metric tons of wheat from Turkey to Port Qasim in February 1993 at $20.16 per metric tons. On failure of the firm to provide the ship, the department awarded the contract to another firm at $26.50 without carrying charges at the risk and cost of the original firm. The risk and cost amounting of $916,604 is still recoverable from the firm at fault. The firm's bank guarantee was also not encashed.
Director General Federal Audit said the role of Security and Exchange Commission of Pakistan (SECP) in this particular case was very poor. The commission intimated on December 5, 2007 that the company was not registered with them. Again on December 25, they informed the audit that the company had been dissolved in 2003. The matter was also referred to National Accountability Bureau (NAB) in 2003 but the owner of company succeeded in out of court plea bargain.
Ministry of agriculture informed that the matter was pending due to tussle between National Investment Bank and ministry and assured the bank guarantee would be cashed. The special committee of PAC was shocked over revelation of billions of rupee irregularities and expressed their concern over the rosy affairs of ministry. The committee was chaired by Riaz Ahmed Pirzada.