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Sugar procurement: 60 mills paid Rs 14.6 billion by TCP




  • Trading Corporation of Pakistan (TCP) has paid Rs 14.6 billion to 60 mills against procurement of sugar during this year. On the directives of the Economic Co-ordination Committee (ECC) of the Cabinet, recently, state-run grain trader has procured 330,000 tons of sugar from domestic mills, to ease their financial problems regarding clearance of sugarcane growers and banks’ payments. 

    Bumper sugarcane crop and low prices in the domestic market have created financial problems for sugar mills making them unable to pay billions of rupees to sugarcane growers. Therefore, on the request of Pakistan Sugar Mills Association (PSMA), the federal government directed TCP to procure the commodity from domestic mills through open tender. 

    TCP successfully awarded the tender in January this year and now it is engaged in clearance of the dues of mills, which supplied sugar and accordingly submitted their bills with state-run grain trader. Ever since the award of sugar procurement tender, TCP has completed procurement of over 278,300 tons of sugar from domestic mills and accordingly paid Rs 14.69 billion to some 60 sugar mills. These payments have been made after getting Pakistan Standard Quality Control Authority (PSQCA) and Pakistan Council of Scientific and Industrial Research (PCSIR) testing reports, staff surveyor report, stock inspection report and handing-over, taking-over certificate duly signed by surveyor, Muqadam and sugar mill’s representative, he said. 

    Sources said sampling from 70 sugar mills has been completed and testing report of 64 mills have been received, out of which some 60 mills have received payments, while payment to 4 mills was in process. The remaining mills are likely to get payment in one week. 

    “We are making payments after taking physical charge of procured sugar and completing all the legal formalities,” an official said and added that so far the corporation has released payment to some 60 sugar mills. Payment is TCP’s top priority, however, till the completion of legal formalities, it is not possible for the corporation to make payment, he said. 

    M/s Huda Sugar Mills and Kamalia Sugar Mills were lowest bidder selling 10,000 tons of sugar each to TCP. These two mills have got a total amount of Rs 1.05 billion against supply of 20,000 tons of sugar. In addition, cumulatively an amount of Rs 13.64 billion has been disbursed among 58 other mills – Sanghar Sugar Mill, Ranipur Sugar Mill, Macca Sugar Mill, HaqBaho Sugar Mill, FECTO Sugar Mill, Abdullah Shah Ghazi Sugar Mill, Dewan Sugar Mill, Shah Murad Sugar Mill and Sindh Abadgar Sugar Mill, JDW Sugar Mill, Deharki Sugar Mill, Chaudary Sugar Mill, Baba Fareed Sugar Mill, SGM Sugar Mill and Fatima Sugar Mills – have received payments. Each mill has supplied 4,920 tons sugar and received an amount of Rs 259.776 million. 

    On December 14, 2012, TCP issued sugar procurement tender for purchase of 330,000 tons of sugar. In response to the tender, opened on January 14, 2013, TCP received 71 responsive bids for a total of 660,000 tons. The rates quoted by the bidders for varying quantities ranged from Rs 52,800 per ton to Rs 59,250 per ton. 

    Initially, TCP awarded the tender to two lowest parties, ie, Kamalia Sugar Mills and Huda Sugar Mills at a price of Rs 52,800 per ton for 10,000 tons each. However, to complete the purchase of total targeted quantity of sugar, rest of the bidders, who quoted higher rates in the tender were asked for matching the lowest bid price and responding to the TCP’s offer all remaining mills also agreed to supply sugar at lowest price. 

    Copyright Business Recorder, 2013

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