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ISLAMABAD: The Federal Government is still unclear how to transfer Sugar Advisory Board (SAB) to a new Ministry from the Ministry of Industries and Production due to procedural issues, sources told Business Recorder.

The issue of SAB’s allocation echoed at the Federal Cabinet meeting held on August 31, when the minutes of Economic Coordination Committee (ECC) were presented for ratification.

The sources said, during the discussion, allocation of Sugar Advisory Board, to appropriate most relevant Ministry was discussed. Some of the members were of the view that it should remain with the Ministry of Industries & Production, while others suggested that it should be transferred to the Ministry of National Food Security & Research.

It was also pointed out that the subject of sugar, as per Rules of Business, is with the Ministry of National Food Security & Research. It was further stated that the matter was already under consideration in the CCIR.

On April 21, 2021, Makhdoom Khusro Bakhtiar, soon after assuming the charge of Minister for Industries and Production, wrote a letter to Prime Minister Imran Khan, requesting him to transfer SAB to some other Ministry to avoid any “possible perceived conflict of interest that may arise” and to allow the body to function without any public objection. However SAB has not yet been allocated to any other Ministry despite passage of five months.

ECC likely to allow import of 100,000 MT of sugar

On August 25, 2021, the ECC held threadbare discussion on the import of sugar after being informed that the current sugar reserves stood at 1.18 million MT, which will be exhausted by end-October, 2021.

Finance Minister observed that the ECC and the Federal Cabinet took a decision on import of 500,000 MT sugar in January, 2021. Since then, only 100,000 MT sugar was imported. During this period, a number of tenders for importing sugar were scrapped for reasons not recorded.

The ECC observed that the import of sugar was now being proposed at a higher cost that may result in substantial loss to the national exchequer.

The ECC opined that there was a need to look into the reasons for non-procurement of sugar through imports immediately after the decision by the ECC and Cabinet in January 2021, the reasons for scrapping tenders for import of sugar and the authority which decided to scrap the tenders leading to accrued financial loss as a result of late import of sugar.

PSMA urges govt to import up to 300,000 tons of sugar

The ECC also constituted a Committee under the Chairmanship of Secretary, Finance Division, comprising Secretary, Industries Production Division, Secretary, Commerce Division, Secretary, National Food Security, Research and Secretary, Law, Justice Division to look into the: (i) reasons for non-procurement of sugar through import immediately after the decision by the ECC and Cabinet in January, 2021; (ii)reasons for scrapping tenders for import of sugar and the authority which decided the said scrapping; and (iii) financial loss to be accrued due to late import of sugar.

The Committee will submit its report to the ECC for consideration with viable recommendations to make the process of import of sugar more transparent and efficient. Secretarial support to the Committee shall be provided by the Ministry of Industries and Production.

In another summary the MoI&P submitted the following proposals to the ECC to import the remaining 500,000 MT of sugar for strategic reserves: (i) approve an additional amount of Rs27 billion, with the cumulative total of Rs45 billion, to import 500,000 MT of sugar. Finance Division may arrange funds to the tune of Rs45 billion through supplementary grant or any other financial arrangement for import and storage of sugar for three months approximately (calculated on the basis of landed cost per metric ton of the last tender floated by TCP) and warehousing cost of TCP; and (ii) Ministry also requested the ECC to direct the TCP to make storage arrangements along with USC. The sugar will be released for sale as per market requirements. The ECC approved both the proposals.

The Cabinet has ratified the decisions of the ECC regarding constitution of Committee to probe the reasons of scrapping sugar tenders and fix responsibility, in addition to import of more sugar.

Copyright Business Recorder, 2021

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