Government decides to procure sugar from PSMA through TCP

The government has decided to procure 50,000 tons of sugar from Pakistan Sugar Mills Association (PSMA) through the Trading Corporation of Pakistan (TCP) instead of Utility Stores Corporation (USC). The decision was taken by an inter ministerial meeting presided over by the Additional Secretary Ministry of Industries, Javed Iqbal Awan and attended by officials from other ministries and Chairman Pakistan Sugar Mills Association(PSMA), Javed Kayani.
There was consensus among the participants that TCP should follow prevalent payment mechanism according to which 90 per cent payment is made to the mills immediately after finalisation of contract whereas 10 per cent after the mills present a certificate showing that all payments of growers are cleared. The ECC also directed the committee to ensure farmers/ growers payment.
A meeting of the Economic Co-ordination Committee (ECC) of the Cabinet on May 7, presided over by the Finance Minister, allowed purchase of only 50,000 tons of sugar from PSMA. It was also decided that sugar would be purchased after completing all necessary codal formalities and the interim arrangement would be reviewed by the ECC after its purchase.
According to official documents, ECC also directed that the maximum price of sugar to be determined by the committee to be reflected as upper limit of price in tender. The sources said, another meeting has been convened on May 16, to finalise the upper limit price of sugar to be procured from PSMA.
"We have invited Cane Commissioners of Punjab and Sindh besides Agriculture Prices Commission's officials and PSMA to finalise the upper limit of price of sugar on the basis of their calculations," the sources maintained. When contacted, Additional Secretary Industries told Business Recorder that total sugar production was 4.1 million tons in addition to 0.4 million tons available with the TCP, which implied that there would be no shortage of sugar in the country during this year. However, the government has decided to build strategic reserves by procuring sugar from PSMA to avoid any artificial shortage.
The sources said, those sugar mills which failed to supply sugar to TCP according to the contract have been blacklisted. Some of the mills are as follows: (i) M/s Abdullah (Ex-Yousuf) Sugar Mills Ldt. Sargodha) -non replaced TCP's stocks - 13,265, 547 MT - total amount of claim up to December 31, 2010- Rs 547, 425,884/- recovered by the sugar mill up to December 31, 2010-Rs 28,000,000/- refunded after December 10, 2010-Rs 10,000,000+ Rs 5,000,000 . Total recovery was Rs 43,000,000 so far.
M/s Haseebwaqas Sugar Mills Ltd- non replaced TCP's stocks 5,312, MT- total amount claim Rs 218,652,555-Rs 110,169,587. M/s Abdullah Sugar Mills Ltd (Depalpur)- non replaced TCP's stocks 3,336 MT- total amount of claim up to December 31, 2010-Rs - 131,813,327-total recovery Rs 68,202,477. M/s TMK Sugar Mills Ltd- total non replaced stocks 16,838 MT-total amount of claim up to December 31, 2010- Rs 632,474,448- total recovery Rs 10,000,000 so far.
M/s.Seri Sugar Mills Ltd-total non replaced TCP's stocks 4,400 MT-total amount of claim up to December 31, 2010-total recovery Rs 8,000,000. M/s Kashmir Sugar Mills Ltd- non replaced TCP's stocks 10,595 MT, total amount of claim up to December 31, 2010-Rs 354,643,282/- total recovery Rs 351,544,636. The sources said, the government is considering to charge interest on the total amount claimed by the TCP.
A spokesman of Kashmir Sugar Mills has clarified that the mill has cleared all the claimed amount, however, a dispute of Rs 6 million exists on this amount which will be resolved by a committee. The sources said, Fatima Sugar Mills which cleared the TCP's claim has not been blacklisted.