Trading Corporation of Pakistan (TCP) Chairman Dr Riaz Ahmed Memon has sought help from Chief Secretary Sindh Syed Mumtaz Ali Shah for clearance of over a decade old outstanding amount of Rs 18 billion pending against supply to provincial food department, official sources told Business Recorder.
According to the facts, in financial years 2004-05, 2007-08 and 2008-09 on the directives of federal government, the TCP supplied imported wheat to the government of Sindh and on the basis of the received quantities by Food Department Sindh, bills were issued accordingly.
As per the TCP, an amount of Rs 18.042 billion including mark-up up to December 31, 2018 is receivable from Food Department for supply of imported wheat, ie, Rs 4.290 billion including mark-up in 2004-05, Rs 4.131 billion in 2007-08 and Rs 9.621 billion in 2008-09.
The official record further reveals that total outstanding amount excluding mark-up stood at Rs 2.846 billion whereas mark-up is over Rs 15 billion. The TCP claims that despite repeated requests and 12 number of persuasion letters, the matter is still remained un-resolved.
"Since TCP imported and supplied wheat through commodity operation financing account by Consortium of Banks which charge mark-up, the non- payment of outstanding dues is adding up mark-up to Food Department, Government of Sindh, on daily basis," the chairman TCP said, adding that the rate of interest is also increasing day-by-day which will add up to further loss of revenue to Food Department. The chairman TCP in his letter has sought personal intervention of chief secretary Sindh in the matter requesting him to issue necessary directions to Food Department to remit an amount of Rs 18.042 billion to the TCP at the earliest.
Pakistan was a net wheat importer until 2000. Since then, the country has either imported or exported wheat, depending on domestic production. For instance, even in the aftermath of the 2010 flood, Pakistan exported up to 2 to 3 million tonnes of wheat.
According to FAO, the government of Pakistan uses commercial loans to finance the purchase, storage and sale of wheat and other commodities that it considers important for food security. The government procurement agencies and provincial food departments use government guarantees to obtain loans from private banks, which they must repay themselves. According to SBP, there has been a significant increase in bank credit for commodity operations over recent years.