The federal cabinet has approved to exempt import of three million metric tons wheat that is worth around $725 million at current prices from the purview of the Public Procurement Regulatory Authority (PPRA) rules “in the larger national interest”.
The cabinet gave the approval through circulation of the summary instead of bringing it up as a regular agenda item for a decision. The cabinet had given the exemption on recommendation of the PPRA Board that is headed by Finance Secretary Yousaf Khan.
The Ministry of National Food Security and Research had requested the PPRA Board to exempt the import of four million metric tons of wheat which at today’s black sea wheat rate of $242 is worth $1 billion.
The prime minister in his capacity as minister in-charge of the Cabinet Division has approved submission of the summary, through circulation, amongst members of the federal cabinet.
However, the board had decided that since procurement by private sector did not fall within the ambit of the public procurement, therefore, the same cannot be considered for approval, according to the cabinet summary.
The government last month decided to import four million metric tons of wheat in fiscal year 2021-22 to meet the domestic consumption requirements. This is despite the fact that the country has good wheat production, estimated at 27.3 million metric tons. The production is about two million metric tons less than the estimated consumption.
It will be the consecutive second year when Pakistan would import wheat to meet its domestic requirements. The situation arose after both the Pakistan Muslim League-Nawaz (PML-N) and the Pakistan Tehreek-e-Insaf (PTI) governments exported about 5.5 million metric tons of wheat.
During the July-May period of the just ended fiscal year, Pakistan imported 3.6 million metric tons of wheat, costing the cash-starved country $983 million, according to Pakistan Bureau of Statistics.
Earlier, the federal cabinet had decided that the government would import two million metric tons of wheat through the Trading Corporation of Pakistan and one million metric ton under the government-to government deal. The private sector will be allowed to import the remaining one million ton by waiving duties to bring down import prices.
The PPRA Board had met on June 18 and “decided and directed the PPRA management to recommend to the federal government under section 21 of the PPRA Ordinance 2002 for grant of partial exemption from the applicability of Rules 5, 13, 35, 38 and 40 of the Public Procumbent Rules, 2004, in the larger national interest, to the Ministry of National Food Security and Research for the procurement of 3 million tons of wheat,” according to the cabinet summary.
The PPRA rule 5 says whenever these rules are in conflict with an obligation or commitment of the federal government arising out of an international treaty or an agreement with a state or states, or any international financial institution the provisions of such international treaty or agreement shall prevail to the extent of such conflict.
Similarly, the government has waived the requirement of giving minimum response time in response to an international tender, which is 30 days.
The exemption has also been given from submitting and announcement of the bid evaluation report under rule 35 that says that procuring agencies shall announce the results of bid evaluation in the form of a report giving justification for acceptance or rejection of bids at least 10 days prior to the award of procurement contract.
The requirement of rule 38 has also been waived that says that the bidder with the most advantageous bid, if not in conflict with any other law, rules, regulations or policy of the federal government, shall be awarded the procurement contract, within the original or extended period of bid validity.
The limitation on negotiations has also been done away with by relaxing rule 40, according to the cabinet summary.
The PPRA rules are usually set aside at time of some emergency, which in present case does not seem arising.
The Trading Corporation of Pakistan had recommended seeking relaxation from the PPRA rules on the grounds that there was high volatility in the international market and in order to take benefit of the lower prices these exemptions were needed, said an official of the Ministry of Food and Agriculture. He said that issuance of large quantity tenders also lead to higher prices.
Published in The Express Tribune, July 2nd, 2021.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ