Trading Corporation of Pakistan (TCP) has decided in principle to procure sugar on pro rata basis from some 29 mills that have agreed to match the lowest bid. Sources told Business Recorder on Friday that in response to the TCP”s price matching offer out of 34 mills, some 29 have agreed to supply the commodity at lowest bid price.
As the TCP has to procure some 45,000 tons of sugar and the offered quantity is more than targeted quantity, the TCP will procure sugar at pro rata basis from these mills, they added. Following the directives of the Economic Co-ordination Committee (ECC) of the Cabinet, the state-run grain trader is procuring sugar form domestic mills to ease their financial issues. The TCP opened a sugar tender, on October 2, 2013 for the procurement of 50,000 tons of the commodity, in which some 36 parties participated and quoted prices ranging from Rs 53,600 per ton (including taxes) to Rs 57,500 per ton (including taxes).
The TCP”s bid evaluation committee accepted the lowest bid submitted by Army Welfare Trust as it conformed to all the terms & conditions. Lowest bidder was awarded the contract for procurement of 5,000 tons of sugar at Rs 53,600 per ton.
As per the tender terms and condition a mill can offer only for maximum quantity of 5,000 tons and M/s Army Welfare Trust”s bid was for same quantity, therefore TCP decided to offer other bidder for price matching of lowest price in order to complete the remaining procurement of 45,000 tons.
For the timely procurement of sugar and to avoid issuance of multiple tendering process, the ECC has already allowed price matching. After acceptance of Army Welfare Trust bid, the TCP asked rest of the 34 bidders, which quoted higher rates in the tender, for matching the bid price. Out of 34 remaining bidders, some 29 parties have shown interest in matching the lowest price and agreed to supply a cumulative quantity of 131,000 tons sugar at Rs 53,600 per ton (including taxes).
As the offered quantity is much higher than remaining quantity of 45,000 ton, therefore as per previous practices the TCP has decided to procure sugar from these mills on pro rata basis to facilitate all parties, which accepted price matching offer. Under pro rata formula some quantity of sugar will be procured from all 29 mills. Source said the TCP will take a final decision on mills” offer in next few days as the received bids are valid for next 15 working days and it”s enough for TCP to finalise the sugar procurement with suitable bidder.