Economic Co-ordination Committee (ECC) of the Cabinet had reportedly rejected Utility Stores Corporation's (USC) supplementary Ramazan Relief Package 2015, saying since few days were left in Ramazan there was no need to procure goods in emergency, sources close to Secretary Industries told Business Recorder.
In April, the ECC had approved Ramazan Relief Package and allowed the USC to procure Atta (flour) 70,000 MT, sugar 50,000 MT, Ghee/oil 50,000 MT, gram pulse 2300 MT, Moong pulse, 500 MT, Mash pulse( washed) 650 MT, Masoor pulse,600 MT, white gram 2,000 MT, Baisan 2,500 MT, dates 500 MT, rice (basmati) 5,000 MT, rice sela 2,500 MT, broken rice, 3,500 MT, squashes and syrups( 1500 ml bottle) 2,500,000, squashes & syrups 800 mi bottle 2,500,000, black tea 3,000 MT, milk( tetra pack) 1,100 MT and spices.
The ECC had also directed the Ministry of Industries and Production to submit progress report in the second week of Ramzan. Industries Ministry informed the ECC on July 8, 2015 that necessary arrangements for the availability of commodities included in the Ramazan Relief Package 2015 have been made through the proscribe procedure. However, certain problems were faced by the USC in the procurement of gram pulse and Baisan. As a result of rain in March and April 2015 the crop of black gram was badly affected. This created situation of non-availability and increased the price of gram pulse and Baisan. Initial tender for gram pulse (bareek) for conversion into Basisan was opened on March 25, 2015 which was finalised at Rs 58 per kg. However, all the successful vendors failed to execute purchase orders and went into default. Consequently, their earnest money was forfeited. Another tender was opened on May 21, 2015 in which all the vendors quoted one rate of Rs 91 per kg which was found on higher side. Consequently, tender was scrapped and the bidders were served with notices.
Keeping in view the urgency, process for procurement of gram pulse and Baisan through negotiated tendering which was successful and USC procured 1150 MT gram pulse at Rs 87 per kg.
According to sources, USC is also selling sugar at Rs 58 per kg with a subsidy of Rs 5 per kg against the approved subsidy of Rs 3 per kg.
During a meeting of the National Price Monitoring Committee on June 25, 2015, USC was advised to resubmit the case to the ECC in case it wished to propose amendments in the quantities and commodities based on consumption patterns but remaining but remaining within the approved total amount of subsidy.
Accordingly following amendments were proposed in the Raman package, 2015 according to which the USC sought approval to procure additional quantities of some items ie flour 10,000 MT, sugar 15,000 MT, Ghee/ oil 10,000 MT, gram pulse 1,000 MT, Baisan 1,000 MT, squashes and syrups, 01 million tons and black tea 500 MT.
The sources said, originally allocation for Ramzan package was Rs 1.3 billion which was later enhanced to Rs 1.54 billion. USC's management argued that some products are short whereas some products were procured less than the required quantity.
The entire ECC headed by the Finance Minister observed that since few days are left in Ramazan and sought justification that why huge quantity of sugar, flour, squashes, baisan and gram pulse is being procured as these products will not be sold and national exchequer will be wasted.
Finance Minister was furious on the acting Managing Director for failing to procure two main items ie gram pulse and Baisan. "Were these two not available in the market", the sources quoted the finance minister grilling the MD USC.
Finance Minister was of the view that as the prices of sugar are already high in the market due to Ramzan, immediate procure of 10,000 MT sugar will further fuel the price.
USC which is being controlled by defecto Minister for Industries and Production and another close aide of Industries Minister, Fayyaz Shah - a former employee of USC. Most of the decisions regarding procurement and awarding of contracts are being taken on the informal advice of both the key players.
USC management acknowledged in writing before the ECC that the management procured gram pulse and Baisan through negotiated deal which is grave violation of PPRA rules. Insiders claim that all procurement deals are being done in accordance with the wishes of defecto Minister and Fayyaz Shah. Different items are also being regularised in USC on the instructions of both key players.
Sources in USC said that the regularisation rate of only one item is being charged at Rs 2 million and recently dozens of items are regularised in the USC. Sometimes senior officials are of the Ministry are pressurised to get their nod on the files.
Unconfirmed reports suggest that the incumbent acting Managing Director paid Rs 30 million to extend his stay on the position. However, talking to Business Recorder he refused such speculations.