The procurement of sub-standard rice and its late disposal inflicted a loss of Rs 11 billion on the national exchequer, a report compiled by the Auditor-General of Pakistan said. According to the Audit Report 2011-12 on Accounts of Public Sector Enterprises, the Pakistan Agriculture Storage and Services Corporation (Passco) arranged to purchase Basmati Rice (Super) at Rs 75,000 per ton.
The report said that Passco suffered huge losses because the paddy, particularly purchased in Sindh, was of poor quality, wet and sub-standard. The Corporation was required to sell its rice stocks in March or April 2009, but the management stocked the rice for about two years and sold it slowly without realising that Passco/government was bearing heavy interest charges. The report said that the last batch of rice stock was dispoosed of in October last year.
The carrying and financial costs, the report said, greatly increased because of the delay in selling the rice stock. Passco, it said, suffered a total loss of Rs 11.014 billion on account of the deal. The Audit was of the view that the management should have investigated the procurement and disposal process which caused huge losses. The matter was reported to the management on November 28, 2011. The management, in its reply dated January 17 this year, stated that Passco rejected allegations levelled in reports published in various newspapers. It said that losses sustained by Passco had been picked up by the federal government because ”wet rice” was procured and disposed of in accordance with the directives of the ministry of food and agriculture. The reply was not convincing as funds provided, acquired or generated by the Corporation were public funds and those should have been utilised with due care and caution.
The DAC, in its meeting held on January 27 this year, directed the management that the case be referred to the Ministry for an inquiry into the matter.
Copyright Business Recorder, 2012