PTI govt allows TCP negotiate wheat price

Talks with suppliers will increase competition, bring commodity within prescribed time frame

ISLAMABAD:

The government has allowed the Trading Corporation of Pakistan (TCP) to negotiate and ask wheat suppliers to match the lowest bid price and has relaxed procurement rules to reduce the time required to bring wheat into the country.

In order to review wheat and flour prices, a high-level meeting was held under the chairmanship of Prime Minister Imran Khan at the PM Office on March 3, 2020.

The Ministry of National Food Security and Research briefed the meeting about the measures being taken which included imports through a government-to-government arrangement, TCP, Pakistan Agriculture Storage and Services Corporation (Passco) and the private sector.

After listening to the briefing and keeping in view the scarcity of wheat in the country, it was advised to make immediate arrangements for the import of up to 1.5 million tons through the TCP.

The Economic Coordination Committee (ECC), in a meeting held on July 15 this year, decided to allow the public sector to import wheat, in addition to the private sector.

Total wheat availability in the current year was estimated at 26.059 million tons, including production of 25.457 million tons and carry-forward stock of 0.602 million tons. National consumption was estimated at 27.47 million tons in the 2020-21 season, including a 10% stock for keeping strategic reserves, seed and feed purposes.

In line with the ECC decision, the TCP was asked to come up with modalities and submit proposals for wheat import. A video conference was held on July 29 between the Ministry of National Food Security additional secretary and the TCP chairman.

The TCP calculated the cost of wheat import at Rs5 billion for every 100,000 tons and the total cost for import of 1.5 million tons at Rs75 billion.

Being a public sector entity, the TCP was required to adhere to the Public Procurement Regulatory Authority (PPRA) Rules 2004.

According to Rule 13 of the PPRA Rules, a minimum time of 30 days is required as the "response time" for an international tender.

As per Rule 35, the bid evaluation report is required to be posted on PPRA and TCP websites for 10 days before the award of contact to the lowest responsive bidder. Hence, in normal circumstances, the TCP requires 110-120 days to complete an international procurement project.

Owing to urgency of the matter, the TCP may be permitted to adopt one of the options.

It may go for normal procurement under the PPRA Ordinance 2002 and PPRA Rules 2004, which entail a minimum 30 days of response time for the receipt of bids or proposals from the date of publication of advertisement or notice and at least 10 days between the announcement of bid evaluation and the award of contract (covered by Rule 13 and Rule 35 respectively).

The TCP may seek exemption from the specifics of Rule 13, which will remove the minimum requirement of 30 days but the requirement of 10 days will remain in place.

It may engage in direct contracting under Rule 42(c) and associated provisions, which will remove both the 30-day and 10-day requirements. It may also resort to negotiated tendering as provided in Rule 42(d), which will remove the 30-day and 10-day requirements.

In order to overcome wheat shortage, bring down wheat and flour prices, and replenish the strategic reserves, the National Food Security and Research Division proposed import of the commodity as per specifications notified in the Gazette of Pakistan on November 14, 2008 and keeping in view different options for consideration of the government.

It suggested that the import of 1.5 million tons may be allowed through the TCP immediately at a cost of Rs75 billion by waiving all duties and taxes.

The cabinet considered a summary titled "Import of wheat through Trading Corporation of Pakistan" in its meeting held on August 8. It approved the proposal given by the National Food Security Division with exemption from Rules 13 and 35 of PPRA Rules 2004 in a bid to reduce the time required for import.

It also gave permission to the TCP for negotiations with different suppliers to match the lowest bid price as it would increase competition as well as efficiency of bringing the commodity within the prescribed time frame.

Published in The Express Tribune, August 19^th, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.