Directionless investment: Cold storage unit wasted as ice cream supply hub
The facility, built to boost exports of horticultural and other perishable goods, has not served its primary purpose since it was built in 2009, a Punjab government official said.
Sources said that the building was part of an initiative under which the previous government run by Chaudhry Pervaiz Elahi established the Punjab Agri Marketing Company (Pamco), in 2004 in a bid to introduce modern processing of perishable items.
The company was mandated to assist the private sector in establishing an integrated cold chain infrastructure and promote local agri-food businesses in national and international markets via export.
The company was also mandated to build cold storage facilities with the help of the private sector at airports of Lahore, Multan, Rawalpindi, Rahim Yar Khan and Faisalabad for the storage of fruit and vegetables.
The company constructed its first cold storage unit, costing Rs100 million at the old terminal of Lahore airport after acquiring land from the Civil Aviation Authority (CAA) on a 30-year lease, paying an annual rent of Rs2 million.
After its completion, it was decided to outsource the storage unit’s operational function without keeping in mind its aims and objectives.
The bureaucrats basically urged the board of directors to support the idea of letting the private sector run the facility.
As many as 10 firms dealing with cold storages and logistics business submitted expressions of interest and four were shortlisted for auction.
In November 2009, the old storage was handed over for a three-year period to a private firm named Agility at an annual rent of Rs3.6 million.
Surprisingly, the company was not required to keep the facility as a storage unit for the export of fruit and vegetables.
In order to keep a strong hold on the company, Chief Minister Shahbaz Sharif became the chairman of Pemco by removing the sitting incumbent Dr Zafar Altaf in December 2008.
The step was taken after the provincial government started facing administrative problems in dealing with key issues relating to Pemco.
In January 2009, Mansoor Arfeen, the CEO of Pemco, was replaced by Mian Shaukat Ali, a progressive farmer, to make the company more objective-oriented.
However, none of these steps were enough to bring the company back to its original aims, another official said.
The Punjab government, which was searching markets abroad, failed to utilise a purpose-specific project, resulting in complete wastage of public money.
Saad Tariq, the manager of Agility, said that the storage was being used primarily to store local ice cream brands, adding that no food export was being done via this cold chain.
Arif Nadeem, the provincial secretary for agriculture, agreed with the assertion that the facility was not being used for its original purpose.
The government had initially outsourced the first mass cold storage unit to a “well-reputed company dealing in same business with a heavy infrastructure” to study the effects on local economy. He said that the idea for building four other storage units had been shelved for the time being.
He said that the impact of these facilities would be felt after eight to 10 years, he added. The government was earning Rs1.6 million annually, said Nadeem in support of his viewpoint.
Published in The Express Tribune, January 27th, 2011.
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