Urea import deal unlikely to mature

The successful completion of a deal between Trading Corporation of Pakistan (TCP) and M/s Toepfer International for importing 50,000 tons of urea is still doubtful, as the contract award letter was issued after expiry of bid. Sources said that in response of TCP”s tender award letter, the lowest bidder regretted via an immediate reply and asked TCP to wait till Monday (today). 

The bidder said that markets in the Gulf region normally remained closed on Fridays, while ones in Europe were closed on Saturdays and Sundays. Therefore, the bidder said that its local agent was unable to approach its supplier and producer. According to the terms and condition of the urea import tender, all bids were valid for just 48 hours. 

TCP had opened the tender on June 5 this year and accordingly all bids expired on June 6. While, TCP awarded 50,000 tons of urea import contract to M/s Toepfer International on June 7 at about 10 pm, the sources said. 

Sources said that before awarding the urea tender to lowest bidder, a TCP official also called for extending the bid”s validity, but M/s Pacific – the local agent of M/s Toepfer International – had made it clear that because of the weekend, it was not able to respond quickly. 

In the contract award letter, TCP gave a week to M/s Toepfer for depositing performance guarantee equivalent to five percent of the total contracted quantity as per clause (a-b) of the tender. The last date for depositing the performance guarantee is June 13, after which a Letter of Credit will be established by the corporation. In response of TCP”s urea import tender, which was opened on June 5, as many as 15 international bidders/suppliers had submitted their offers, quoting prices ranging between from $335 to $371 per ton Cost and Freight (C&F). 

M/s Toepfer International emerged as the lowest bidder, which offered to supply 50,000 tons of urea at a price of $335 per metric tons through Gwadar port, besides depsoting a bid bond of $570,000. The second lowest bid of $337.17 per ton was submitted by M/s Trammo for the supply of the same quantity through Gwadar, Karachi and Bin Qasim. However, TCP, declared the first lowest bid non-responsive, and awarded the contract to the second lowest bidder namely M/s Trammo, which quoted $2.17 per ton higher price against the first lowest bid. 

However, the ministry of commerce took strict notice of the irregularity in urea import tender on a report published in Business Recorder, asking TCP, via a letter (No1(1)/JS/FT-III-2013), for awarding the contract to the first lowest bidder, which had previously been declared non-responsive. On Friday, the TCP reversed its previous decision, awarding the urea import contract to the first lowest bidder. 

Following the directives of the ministry of finance, Sahto Anwar Ahmed Jaan, the General Manager (imports), sent a contract award letter to the lowest bidder namely M/s Pacific Exim Pvt Limited (the local agent of M/s Toepfer International-Asia) for the supply of 50,000 tons of urea. The deal is likely to mature on Monday after M/s Toepfer responds to the TCP offer. Sources said that TCP”s decision would save $108,500 on the import of 50,000 tons of urea, besides millions of rupees in subsidy on the imported urea. 

Copyright Business Recorder, 2013

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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