The government of Pakistan established the Trading Corporation of Pakistan (TCP) as the country's first international trading house in July 1967. This private limited company, which is wholly owned by the federal government, enjoyed a monopoly over imports of select industrial raw materials from abroad until 1980-1 when the government allowed the private sector to import such materials as well.
The mandate of the TCP can be broadly put into five categories, including imports, exports, counter trade, procurement of lint cotton, import of fertiliser and other activities. Besides being charged with the responsibility of ensuring adequate supplies of urea in the country, TCP is also tasked with the import of commodities such as sugar, pulses, wheat and other grains whenever domestic production fails to meet the demand. Purchases of soya bean oil under PL-480 and the import of Malaysian palm oil under the credit limit facilitated by that country's government are also conducted by TCP.
What is its mandate?
On the exports' front, TCP is tasked with the utilisation of export credits offered by the government to Malaysia, Central Asian countries, members of the Commonwealth and others. The corporation is also mandated with the task of developing and promoting the export of fruits, vegetables and minerals from Pakistan to international destinations.
Back in 2001, the government merged the Rice Export Corporation of Pakistan (RECP) into TCP. Consequently, since August 2002, TCP has been responsible for the inspection of brown rice consignments shipped to European countries to ensure that the quality standards stipulated by buyers in the EU are met by local suppliers.
In domestic markets, the corporation is responsible for the implementation of support prices offered by the government. For instance, the wheat support price is administered by this corporation. TCP is also involved in the sale and purchase of critical items such as cotton and sugar to ensure price stability in the country.
In order to address shortages of commodities such as sugar, TCP not only ensures supply through the Utility Stores Corporation (USC) and Canteen Stores Department (CSD); but also, in recent times, sold sugar and other commodities to the private sector through periodic auctions. It imported about 1.1 million tons of sugar to the country in 2010-11 and currently holds more than 350,000 tons of the sweeteners at its warehouses. Similarly, it imported 100,000 tons of urea from the open market in addition to 125,000 tons imported under the Saudi Fund for Development to meet the country's demand during the rabi season of the current year. All purchases from the open market by TCP are subject to comply with the Pakistan Procurement Regulatory Authority.
How is it structured? A federal secretary mans the post of Chairman at TCP, while a company secretary assists in oversight of the corporation. Five directors are appointed for the oversight of finance, planning and procurement, sales and stores, port operations and logistics functions; each of whom reports directly to the Chairman. Besides these, general managers of internal audit, legal, general administration and human resources as well as the general manager of the regional office in Islamabad report directly to the Chairman TCP. In all, the corporation employs 632 members, according to the official website of TCP, including 478 staffers.
Operationally, the corporation is split into thirteen divisions. These are: human resource and general administration, legal, finance, accounts, audit, export and marketing co-ordination, imports, cotton, real estate management, godown, wheat export, port operations and dispatch operation. The corporation's main office is situated in Karachi while it operates a regional office in Islamabad and two sub-regional offices in Lahore and Multan.
How does it conduct domestic operations? TCP maintains storage facilities at four locations in the country. Of these, three are situated in Karachi - in Pipri, Landhi and Korangi - while one is located in Multan. Cumulatively, TCP has about 1,332 acres of storage space available at its godowns where sugar, cotton, pulses and other grains as well as urea can be stocked. Godowns in Korangi and Multan are exclusively dedicated to the storage of cotton. Private business parties can also avail these storage facilities by renting them from TCP.
In addition to these storage capacities, the corporation also operates cotton procurement centres spread in 13 cities throughout the country. There are four such centres each in Punjab and Sindh. In Punjab, the centres are situated in the cotton belt hubs including Rahim Yar Khan, Multan, Bahawalpur and Dera Ghazi Khan. The centres in Sindh are situated in Mirpurkhas, Nawabshah, Sukkur and Hala.
How does TCP evaluate bids for its operations? The bids evaluation committee of TCP convenes as soon as any new tenders are opened by the corporation. The recommendations of this committee are then forwarded to the purchase and price evaluation committee.
While all operations are subject to PPRA rules, the salient factors that determine the sanction of tenders among aspiring parties include consideration of the quality of the product offered, prices quoted by bidders, shipment and delivery schedules quoted, along with detailed specifications regarding the mode of delivery (including the age of the vessel, its capacity and operators), the port of landing, country of origin (in case of procurement from abroad), the mode of payment offered, etc.
In the case of frequently traded commodities including urea, pulses, sugar and wheat, the corporation maintains a list of pre-qualified companies which includes local as well as foreign firms. However, all tenders must be publicly announced by TCP, prior to the award of any contract.
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