Investigation: NAB to probe Rs2 billion sugar subsidy case

NA panel wants to know the facts that led to the subsidy offer to millers.

ISLAMABAD:

A parliamentary panel has unanimously decided to send a Rs2-billion sugar subsidy case to the National Accountability Bureau (NAB) for investigation following inability of the ministries of commerce and industries to act in line with its directives.

“The panel will refer the case of unjustified sugar export subsidy to NAB to determine the basis on which the subsidy was fixed,” the National Assembly Standing Committee on Industries and Production said in a meeting held on Friday.

In its 2008-13 tenure, the Pakistan Peoples Party government had approved the provision of Rs2 billion in inland subsidy on the export of 1.7 million tons of sugar. This included subsidy of Rs1.75 per kg on export of 1.2 million tons and Rs1 per kg on export of 500,000 tons.

In an earlier meeting on March 17, 2014, the standing committee had asked the ministries of industries and commerce to refer the matter to NAB. However, they could not comply with the order because Pakistan Tehreek-e-Insaf (PTI) members of the committee had tendered their resignation from the National Assembly.

When the PTI returned to the lower house, standing committee chairman Asad Umar called its meeting on April 22 this year, which was later rescheduled for May 8.

Additional Secretary Ministry of Commerce Azhar Chaudhary disclosed in Friday’s meeting that sugar mill owners had submitted 4,966 rebate claims, but no amount was disbursed.

Umar, who is a top leader of PTI, wanted to know on what grounds the previous government extended the subsidy of billions of rupees to the sugar industry, which was mostly represented by politicians.

Industries Secretary Arif Azim argued that the Ministry of Commerce had sent the summary seeking the subsidy to the Economic Coordination Committee (ECC), so it was the responsibility of the said ministry to send the case to NAB.

On his part, the additional commerce secretary pleaded that since his ministry had taken the summary to the ECC, the case should now be sent by the Ministry of Industries to the accountability bureau.

The standing committee chairman warned that he would unveil the facts at a press conference within a few days.

However, NAB Additional Director Asim Lodhi said the bureau accepted the directives of parliamentary committees as executive orders and the subsidy case could be sent to NAB for initiating a probe. Committee secretary will refer the matter to NAB.

Pakistan Sugar Mills Association Chairman Iskandar Khan had sought an inland freight subsidy of Rs6 per kg but the government approved only Rs1.75 per kg on export of 1.2 million tons and Rs1 per kg on export of 500,000 tons.

He argued that the subsidy was not meant for the sugar millers, but the relief was for the farmers who were not being paid properly. “Farmers are the victims as they have not been educated about enhancing the sugarcane yield.”

Steel mill

Pakistan Steel Mills (PSM) Chief Executive Officer Major General (retired) Zaheer Ahmad Khan came under fire during the meeting for presenting “distorted facts” as the mill was seeking another bailout package to touch 77% of production capacity.

Industries and Production Minister Ghulam Murtaza Jatoi said the mill needed an investment of $1 billion for expansion and turning into a profitable venture and another $200-300 million was required to undertake major repair works.

He said the government was trying to keep the mill viable until it found a buyer, adding the CEO had promised that the mill would achieve 77% production capacity in six to seven months.

“The government wants me to do things in six months which were not done in six years,” remarked the CEO. “We have again sought financial help to reorient ourselves as our manufactured goods are not being sold because of dumping by the Chinese.”

Published in The Express Tribune, May 9^th,  2015.

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