Awan blamed for backing Dubai-based sugar supplier
Parliamentary body stops short of recommending expulsion of Babar Awan from main economic decision-making forum.
ISLAMABAD:
A parliamentary body on Thursday stopped short of recommending to the government the expulsion of Law Minister Babar Awan from the main economic decision-making forum after a top bureaucrat disclosed that the minister pushed for striking a deal with a Dubai-based commodity supplier instead of importing sugar through competitive bidding.
In a meeting of the National Assembly Standing Committee on Commerce, Trading Corporation of Pakistan Chairman Anjum Bashir said the law minister tried to persuade the Economic Coordination Committee (ECC) of the cabinet to strike a deal with Al-Khaleej Group of Dubai for the import of 700,000 tons of sugar.
He said when the government decided to import 1.2 million tons of sugar in February 2010, the Al Khaleej Group saw it breaking its monopoly over Pakistan’s market. The group tried to persuade the government to directly buy 700,000 tons on false offers of deferred payments, he said.
After that, the government entered into negotiations and later on realised that the group was buying time to delay imports, he said. “Talks ended inconclusively in June and on June 29 the government rushed to float tenders for early import.”
Standing committee chairman Engineer Khuram Dastgir said “the committee showed serious concern over inclusion of the law minister in the ECC and his support for a private business group at that forum.”
He said never in the history a law minister has been inducted into the ECC and bearing in mind his tainted record the committee has expressed concern over his taking part in its meetings.
“Al Khaleej Group, the sugar lobby and inability of provinces to lift sugar quotas caused an increase in prices,” the TCP chairman said, adding there was no supply shortage.
During Ramazan this year, sugar prices skyrocketed to Rs84 per kg from Rs60. The Auditor General of Pakistan in its latest report unearthed that the TCP colluded with the sugar cartel in delaying import that eventually caused a loss of Rs4.7 billion to the exchequer and created crisis in the market.
Bashir said a lobby, representing the sugar industry, kept spreading false information that sugar stocks had fallen below 400,000 tons. Against an offer of 100,000 tons, the provinces could only lift 55 per cent of the quantity, proving there was no shortage in the market, he said. “Had the provinces lifted their due share, sugar prices would have come down.”
At the end of July, Pakistan Sugar Mills Association President Iskandar Khan started talking about sugar shortage and that prices would go beyond Rs100 per kg during Ramazan.
Bashir said Pakistan was out of the woods as the country had sufficient sugar stocks and prices also dropped by Rs3 per kg after the TCP decided to sell 50,000 tons in the market.
He said out of import tenders of 1.2 million tons, 585,954 tons of sugar has arrived so far and TCP stocks stand at 268,459 tons. “Hoarders are trying to keep prices at the existing level before the start of crushing season on November 15, but they are threatened by the TCP’s move to release the commodity in open market.”
Bashir said contracts of three suppliers, who had failed to supply a total of 200,000 tons within schedule, have been cancelled and performance guarantees of over $2 million have been fortified.
He said former TCP chairman Saeed Ahmad Khan allowed non-qualified bidders to participate in tenders leading to cancellation of two tenders.
In the international market, sugar prices are going up on the assumption that next year Pakistan would be having enormous shortage.
Published in The Express Tribune, October 15th, 2010.
A parliamentary body on Thursday stopped short of recommending to the government the expulsion of Law Minister Babar Awan from the main economic decision-making forum after a top bureaucrat disclosed that the minister pushed for striking a deal with a Dubai-based commodity supplier instead of importing sugar through competitive bidding.
In a meeting of the National Assembly Standing Committee on Commerce, Trading Corporation of Pakistan Chairman Anjum Bashir said the law minister tried to persuade the Economic Coordination Committee (ECC) of the cabinet to strike a deal with Al-Khaleej Group of Dubai for the import of 700,000 tons of sugar.
He said when the government decided to import 1.2 million tons of sugar in February 2010, the Al Khaleej Group saw it breaking its monopoly over Pakistan’s market. The group tried to persuade the government to directly buy 700,000 tons on false offers of deferred payments, he said.
After that, the government entered into negotiations and later on realised that the group was buying time to delay imports, he said. “Talks ended inconclusively in June and on June 29 the government rushed to float tenders for early import.”
Standing committee chairman Engineer Khuram Dastgir said “the committee showed serious concern over inclusion of the law minister in the ECC and his support for a private business group at that forum.”
He said never in the history a law minister has been inducted into the ECC and bearing in mind his tainted record the committee has expressed concern over his taking part in its meetings.
“Al Khaleej Group, the sugar lobby and inability of provinces to lift sugar quotas caused an increase in prices,” the TCP chairman said, adding there was no supply shortage.
During Ramazan this year, sugar prices skyrocketed to Rs84 per kg from Rs60. The Auditor General of Pakistan in its latest report unearthed that the TCP colluded with the sugar cartel in delaying import that eventually caused a loss of Rs4.7 billion to the exchequer and created crisis in the market.
Bashir said a lobby, representing the sugar industry, kept spreading false information that sugar stocks had fallen below 400,000 tons. Against an offer of 100,000 tons, the provinces could only lift 55 per cent of the quantity, proving there was no shortage in the market, he said. “Had the provinces lifted their due share, sugar prices would have come down.”
At the end of July, Pakistan Sugar Mills Association President Iskandar Khan started talking about sugar shortage and that prices would go beyond Rs100 per kg during Ramazan.
Bashir said Pakistan was out of the woods as the country had sufficient sugar stocks and prices also dropped by Rs3 per kg after the TCP decided to sell 50,000 tons in the market.
He said out of import tenders of 1.2 million tons, 585,954 tons of sugar has arrived so far and TCP stocks stand at 268,459 tons. “Hoarders are trying to keep prices at the existing level before the start of crushing season on November 15, but they are threatened by the TCP’s move to release the commodity in open market.”
Bashir said contracts of three suppliers, who had failed to supply a total of 200,000 tons within schedule, have been cancelled and performance guarantees of over $2 million have been fortified.
He said former TCP chairman Saeed Ahmad Khan allowed non-qualified bidders to participate in tenders leading to cancellation of two tenders.
In the international market, sugar prices are going up on the assumption that next year Pakistan would be having enormous shortage.
Published in The Express Tribune, October 15th, 2010.