ISLAMABAD: The Ministry of Finance (MoF) has reportedly withdrawn its earlier demand for a third-party audit of loans raised by the Trading Corporation of Pakistan (TCP) from commercial banks, instead advising the corporation to conduct third-party audits only for disputed amounts between the concerned entities, well-informed sources told Business Recorder.
In August this year, the Finance Ministry had raised concerns over the high interest rates on loans secured by the TCP from commercial banks and called for a special audit to determine the rates agreed upon by the TCP and whether more competitive terms were available at the time.
However, TCP maintained that it had already undergone a third-party audit by an international audit firm, arguing that a fresh audit exercise would be a duplication of effort, and requested the Finance Division to reconsider its position.
Govt entities owe billions of rupees: TCP receivables stand at Rs308bn
In its recent communication, the Finance Ministry stated: “The Finance Division has examined the request for reconsideration of the requirement for a third-party audit in light of the justification provided by TCP and conveys its agreement with the request. However, in cases of disputed amounts between the parties—particularly pertaining to quantities supplied or received—either a mutually agreed reconciliation may be undertaken by TCP and the recipient agencies, or a third-party audit may be conducted on a need basis.”
The Finance Division further noted that upon reviewing the record and following discussions with stakeholders, a significant volume of receivables remains outstanding due to the absence of formal memoranda of understanding (MoUs) between TCP and recipient agencies, particularly regarding the payment of mark-up on delayed payments.
The Finance Division has asked the Ministry of Commerce to examine the matter and resolve the outstanding issues in consultation with the relevant stakeholders on a priority basis.
TCP is currently paying approximately Rs 143 million per day in mark-up on bank loans obtained for the import of wheat, sugar, and fertiliser due to non-payment by the Utility Stores Corporation (USC), National Fertiliser Marketing Limited (NFML), and the Pakistan Agricultural Storage and Services Corporation (PASSCO).
“We are paying Rs 48.5 million in daily mark-up on outstanding receivables of Rs 73.7 billion from USC, Rs 63.84 million on receivables of Rs 97 billion from NFML, and Rs 30 million on receivables of Rs 46 billion from PASSCO,” an official said.
According to sources, a new settlement mechanism has been in place among the entities since 2018, and there are currently no disputes regarding principal amounts or mark-up under this arrangement.
An Additional Secretary of the Finance Division stated that the Division is unable to extend any subsidy due to fiscal constraints and Pakistan’s ongoing IMF programme. However, a Technical Supplementary Grant (TSG) may be considered through the re-appropriation of funds already allocated to the concerned ministries.
Copyright Business Recorder, 2025
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