Purchase of sugar: TCP issues acceptance letter to Adam Mills

The Trading Corporation of Pakistan (TCP) is said to procure 10,000 tons of sugar from eight sugar mills over and above 200,000 tons, citing Supreme Court’s judgement which changed the procurement plan, well informed sources in Ministry of Industries told Business Recorder. 

Giving details, sources said, in pursuance of the ECC’s decision of May 15, 2012 on the summary of Ministry of Industries on “review/update on sugar situation”, the TCP floated a tender on May 21, 2012 for the purchase of 200,000 tons of white sugar from local sugar mills as per the previous procedure. 

In response to the tender, 47 bids were received for a total quantity of 366,000 tons from amongst the participant bidders. One sugar mill, ie M/s Adam Sugar Mills, which had offered a quantity of 10,000 tons sugar at the rate of Rs 50,500/ per ton was declared as non responsive being TCP’s defaulter. The next lowest rate of Rs 50,510 per ton was offered by M/s Sheikhoo Sugar Mills Ltd for a quantity of 10,000 tons . The rest of the offers ranged between Rs 50,700/- to Rs 55,000 per ton . 

The validity of bids was for 10 working days, ie up to June 20, 2012. The tender award/ price evaluation committee in its first meeting, held on June 7, 2012, decided to issue award letter to the lowest responsive bidder M/s Sheikhoo Sugar Mills for 10,000 tons at the rate of Rs 50,510 per ton. 

As per previous procedure, the committee decided to offer the option of price matching to 45 responsive bidders, who were asked to convey their consent by June 8, 2012, which was further extended up to June 12, 2012 due to the reason that all the participants could not receive letters/ intimation for price matching in time. Out of 45 responsive bidders, 42 bidders consented to match the lowest price of Rs 50,510 per ton. 

Meanwhile, M/s Adam Sugar Mills Ltd which was declared non-responsive by the bid evaluation committee, filed a constitutional petition No 2188 of 2012 against TCP in the High Court of Sindh. The Court observed on June 12, 2012 that the decision of TCP regarding grant of the subject contract would be subject to the Court’s order. 

Upon the advice of TCP’s Legal Advisor, it was decided to continue with the process of procurement. As per procedure, the tender award committee decided to award the balance quantity of 190,000 tons to 42 sugar mills which had agreed to match the lowest prices of Rs 50,510 per ton on pro-rata basis to meet the total targeted quantity of 200,000 tons. 

The sources said, the process of procurement of sugar from local sugar mills was almost complete. Out of 43 sugar mills, the TCP has made payments to 35 sugar mills, and the formalities of procurement of sugar from the remaining 08 sugar mills are in process. 

The Sindh High Court, in response to the Constitution Petition No 2188 of 2012, instructed the TCP, on August 03, 2012, during the hearing of contempt proceeding, to allocate 10,000 tons of sugar for procurement from M/s Adam Sugar Mills Limited and to implement court’s orders within 10 days and/or obtain stay order from the Supreme Court of Pakistan. After a detailed hearing, Supreme Court of Pakistan dismissed TCP’s petition and gave 10 days time to implement the judgement passed by the Sindh High Court on July 10, 2012. 

According to sources, to ensure compliance of court’s orders, the TCP issued acceptance letter to M/s Adam Sugar Mills Ltd for procurement/ purchase of 10,000 tons of sugar at the rate of Rs 50,500/- per ton out of the quota deducted from remaining 08 sugar mills on a pro-rata basis. “We have requested the ECC to approve the procurement of an additional quantity of 10,000 tons sugar (over and above the approved quantity of 200,000 MT) to compensate the 08 sugar mills with a view to avoiding further litigation by the mills,” sources said. 

Copyright Business Recorder, 2012

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