National Assembly Standing Committee on Industries and Production headed by Asad Umar on Monday sought details of benefits estimated at tens of billions of rupees to fertilizer and sugar industries through cheap gas and inland freight subsidy. Additional Secretary claimed that the incumbent CEOs and board of directors are responsible for the destruction of national organisations.
The committee also expressed serious reservations over the absence of Minister for Industries and Production, Ghulam Murtaza Jatoi and Secretary, Shafqat Naghmi from the meeting in spite of the fact that the meeting was rescheduled to ensure their attendance. The Minister after spending weeks in London was in Lahore but none of the officials was aware of his official engagements, if any. Secretary Industries, the meeting was informed, was suffering from fever.
Chairman Committee who is also former Chief Executive Officer (CEO) of Engro Fertilizers Limited (EFL) said that domestic fertilizer industry is being given tens of billions of rupees of financial benefits. Representatives of domestic fertilizer industry were also present at the meeting. Umar argued that billions of rupees subsidy is being given on imported fertilizer urea from the taxpayers” money but the common farmer is not benefiting from this subsidy.
Additional Secretary Ministry of Industries and Production (MoI&P), Khizar Khan admitted that the benefit of subsidy on imported urea is not being passed on to the farmers. “The government extends subsidy on imported urea but farmers do not get it at fixed prices,” he added.
He revealed the Economic Co-ordination Committee (ECC) of the Cabinet has constituted three committees to resolve issues pertaining to urea import and distribution. These committees are being headed by Minister for National Food Security and Research, Secretary Finance and Secretary Industries and Production. He said, fertilizer companies had increased urea bag price by Rs 180 each citing the increase in GIDC as a justification. “The government is also considering the Indian model for import and transportation of urea,” Khan added.
He briefed the committee that domestic fertilizer manufacturers will print prices on bags from March 1, 2014; however the committee members expressed doubts that price printing will benefit farmers. “Farmers are compelled to pay whatever price is demanded at peak times. They don”t bother about the price written on the bag,” committee members observed. The committee directed the Ministry of Industries and Production to prepare a three-year price comparison of domestic and imported urea along with the amount of subsidy by making 2009 as base year.
The committee also directed the Ministry to submit a detailed paper and mechanism through which billions of rupees of inland freight subsidy is being extended to sugar mill owners. “What mechanism is being calculated with respect to subsidy on sugar and who takes the decision,” Asad Umar questioned. Additional Secretary Industries maintained that Ministries of Industry, Finance and Commerce are involved in policymaking, export and subsidy matters which is why one Ministry cannot respond to this query.
Sahibzada Nazir Sultan said that mills are not paying the farmers the agreed price of sugarcane. The Additional Secretary replied that the price of sugarcane is the same but there is a possibility of a little variation in rates. Rizwan Ahmad, who represented PSMA, failed to defend sugar industry with regard to sugar subsidy but mentioned two problems facing sugar mills in co-generation: (i) the government”s intent to procure electricity from mills citing the example of Moeez Sugar Mills that had set up a co-generation plant but the government refused to purchase electricity from it, and (ii) fixation of upfront tariff.
The Additional Secretary Industries informed the meeting that Jahangir Khan Tareen, Secretary General PTI, who is also a sugar mill owner, gave a detailed presentation to Secretary Finance wherein he stated that sugar industry will invest $3.5 billion in co-generation. He further stated that Tareen”s two co-generation power plants are scheduled to start generation soon. The prices of locally assembled cars also came under discussion and Mian Abdul Manan, MNA from Faisalabad, said that local assemblers are charging double prices as compared to India.
Inftikahr-ud-Din, MNA from Chitral, requested the Ministry of Industries to focus on marble industry in Chitral. Earlier, Additional Secretary, Ministry of Industries & Production briefed the Committee about performance of the Ministry and its attached departments and the ongoing projects. MNAs Qaiser Ahmad Sheikh, Sahibzada Muhammad Nazeer Sultan, Surriya Asghar, Sardar Kamal Khan Chang, Sajida Begum, Saleem Rehman, Muhammad Muzamil Qureshi, Iftikhar-ud-Din, Mian Abdul Manan besides officials of the ministry attended the meeting.