Trading Corporation of Pakistan (TCP) is seeking immediate payment of Rs 58 billion, outstanding against different government agencies, to ensure timely bill payment to domestic sugar mills against procured sugar. Sources told Business Recorder on Tuesday that recently the state-run grain trader also approached ministry of commerce for payment of this outstanding amount and urged the ministry to call a joint meeting with all stakeholders to ensure payment in a specified period.
They delay in payment is causing millions of rupees financial loss to the state-run grain trader. It needs billions of rupees funds to continue commodity operations and depend on the bank loan being provided by a consortium of six banks. Tahir Raza Naqvi, recently transferred chairman of TCP, has also sent a written complaint to ministry of commerce stating that several government agencies including Utility Stores Corporation (USC), National Fertiliser Marketing Limited (NFML) and provincial food departments are using delaying tactics for clearance of outstanding amount of TCP. Sources said that TCP has also sought a ministerial committee meeting to resolve the issue on an urgent basis as it was facing huge financial burden in the face of interest payment due to delay in payment. A joint meeting of three ministries, ie, ministry of industries, ministry of finance and ministry of commerce should be called for timely payment, TCP urged in the letter.
Presently, TCP’s receivable with different government agencies stood at Rs 58 billion. The major portion of this amount is withheld with USC, which is procuring sugar for last two years from TCP. Some Rs 26.778 billion of sugar amount is withheld with USC, DGP Army and Pak Navy. Out of total sugar outstanding, some Rs 26.6 billion (including Rs 11.484 billion of 2011 and Rs 15.125 billion of 2012) is receivable from USC. Although, TCP has ended wheat operation two years ago, however several government agencies have still not paid their outstanding amount. TCP’s receivable on account of wheat stood at Rs 17.469 billion.
In addition, Rs 13.781 billion is pending with NFML on account of urea, as TCP is importing urea for last two years and its bagging, transportation and distribution is NFML’s responsibility. MFNL is taking the delivery of urea but not making timely payments, despite receiving funds from ministry of finance, sources said. They said following the directives of the federal government, recently, TCP has started procurement of sugar and requires a massive amount to ensure timely payment to sugar mills. Overall approximately Rs 18 billion will be required for the procurement of 330,000 tons of sugar from domestic mills as TCP has finalised sugar procurement deal at Rs 52,800 per ton. While on the other hand TCP’s credit limit stood at Rs 137 billion, of which some Rs 126 billion have been consumed. Therefore, TCP needs payment of outstanding amount to ensure timely payments to mills.