ISLAMABAD The government`s decision to import urea through the Gwadar port not only caused an additional cost of around Rs585 million to the government exchequer but also delayed the availability of urea fertilizers to wheat farmers.

A well placed source in the ministry of industry told Dawn on Sunday that after causing great damage to this season`s wheat sowing, the government has realized its intervention in the urea fertilizer supply chain at a critical time for the farmers was ill thought.

The government, the source said, eventually withdrew Minister for Industry Mian Manzoor Wattoo`s decision to purchase 50 per cent of the domestic production of urea on January 17 as the government had no outlets to distribute the same and just few days were left to finish putting urea to wheat fields.

Whatever supply infrastructure existed in the public sector was dismantled after the fertilizer trade was privatized, the source noted.

In late December 2008 Wattoo had decided to intervene in the fertilizer market, ignoring the fact that government had no supply line. This ill-timed decision by the government caused huge problems to wheat farmers, but earned windfall profits to fertilizer dealers and bribes to the corrupt who managed the process, the source added.

According to the source, it also encouraged the black-marketers and profiteers to create an artificial shortage of urea price of which edged up to around Rs900 per 50 kg from the government-fixed level of Rs570 in the open market.

By the time government decided to stop purchasing urea from domestic producers, 74,500 tons of urea had reached the government with the remaining 275,500 tons on order had to be delivered by end of January or early February, the source said.

Bungling at Gwadar
A senior official requesting anonymity told this scribe that even the distribution of imported urea caused problems because it was unloaded at Gwadar.

Since the newly-opened port on Makran coast was not connected with rail line, transporting the imported urea by trucks to faraway wheat growing areas in the country besides additional transportation cost also delayed delivery, he said.

The official admitted that the government knew that there was shortage of urea in the market and still delayed its import by at least one month. And when it did import, it decided unwisely to unload the urea ship at Gwadar port, which has storage, handling and transportation problems.

The government imported 225,000 tons of urea Gwadar port. Two shipments of around 78,000 tons were expected to reach the port shortly, the official added.     

The official said it took them around two weeks to settle issues ranging from handling to storage and transportation that cropped up immediately after the shipment reached Gwadar port, which were not anticipated at the time the decision was taken.

To the surprise of the government, Balochistan`s labour and transport unions prevented outsiders from handling urea shipments. However, they announced that they would only handle 20 kg bag and opposed the government`s 50 kg bag, which delayed the clearance process.

After resolving this issue, the official said it was found that the coastal highway, which linked the port with Karachi, was damaged at two places on which trucks could not transport goods. After intervention at the higher level, the patches were repaired but it could only be used for small trucks.

The official said after the repair work on the coastal highway the imported urea transported through small trucks to Hub for onward transportation through bigger trucks was delayed, and the urea could not reach the consumers on time.

The lack of sufficient transport also delayed the transportation of urea, the official said, adding that the NLC was also approached for the purpose but the government-owned transporting company wanted the whole supply contract subject to ending contracts with private transporters.

The government handled 562,000 tons of urea till January 28 last both imported and locally purchased from manufacturers.

A leading urea distributor, requesting not to be named, said that the government deliberately created a system with loopholes to benefits some at the cost of farmers and also destroyed the private companies supply lines established over decades.