Govt probes TCP chief over delay in wheat import

Opportunity to import commodity from Russia at $280 per ton was missed

ISLAMABAD:

After sugar import, the government has initiated a probe against the Trading Corporation of Pakistan (TCP) chairman for inordinate delay in executing a wheat import deal on a government-to-government basis.

The Economic Coordination Committee (ECC) has tasked the Ministry of Commerce to act in this regard.

In the past, the government had the option to import wheat from Russia at $280 per ton in a government-to-government arrangement, however, the opportunity was missed.

Bureaucratic hurdles caused the delay and now the country is going to procure 120,000 tons of wheat at a cost of $369.50 per ton to build strategic reserves.

Earlier, the ECC had started an investigation into the scrapping of a number of tenders for sugar import.

The ECC and federal cabinet approved the import of 500,000 tons of sugar in January 2021 but only 100,000 tons could be imported so far. During this period, a number of tenders for sugar import were scrapped for unknown reasons.

The ECC observed that import of sugar was now being proposed at a higher cost, which might deal a blow to the national exchequer.

The Ministry of National Food Security and Research briefed the ECC about the availability of wheat in the country.

In this regard, two options were presented for ECC’s consideration and approval. Under the first option, the ECC was asked to accept the lowest bid price of $369.50 per ton offered by Cargill, Pakistan for the import of 120,000 tons from October to November 2021.

The second possibility was to allow the TCP to scrap the tender and issue a fresh one in the hope of receiving a reasonable price offer.

It requested the ECC to direct the TCP to ensure import of a maximum quantity through the process of matching, which is allowed under the Public Procurement Regulatory Authority (PPRA) rules.

In addition, the food ministry demanded that the ECC order the TCP to explore and expedite the option of wheat import through a government-to-government arrangement.

Keeping in view the shortage of wheat flour in the local market, the minister of interior termed the issue a sensitive one.

Moreover, the demand for wheat flour has been increasing in Afghanistan for the past one month due to political transformation, which is expected to affect prices of wheat in Pakistan. Therefore, the immediate procurement of wheat is in the best interest of Pakistan.

The minister for national food security endorsed the view and stressed that his ministry had repeatedly requested the Ministry of Commerce and TCP to make arrangements for maintaining the strategic reserves of wheat in order to avoid price fluctuation and shortages. However, ECC members regretted that the said arrangements were not made in time.

The ECC considered a food ministry’s summary titled “Urgent advice relating to award of third international wheat tender opened on September 7, 2021” and approved the proposal of awarding the contract at a higher price.

Published in The Express Tribune, September 14^th, 2021.

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