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Published 27 Aug, 2010 01:24pm

The sugar barons of Pakistan?

Arshad Sharif

Is the simple act of short-listing a company for supplying a commodity like sugar, a multi-million dollar opportunity for minting money? It seems like even the simple act of buying sugar internationally is a lucrative business in which the power players take arbitrary decisions at the expense of the national exchequer. Are arbitrary decisions taken to benefit the powerful sugar barons who have links to the power corridors? It does not take rocket science to understand this, given the recent price hike in sugar prices in the country.

Consider just one example of arbitrary decision-making by top level management at the Trading Corportaion of Pakistan (TCP) which has allegedly caused the national exchequer a loss of at least Rs 6 billion on the import of sugar.

According to a letter written by the Secretary Law to the Principal Secretary and to the Prime Minister, “Chairman TCP without any authority whatsoever has written letters to his chosen companies which are enlisted with the TCP. Other companies were left out and Chairman TCP picked up companies for reasons best known to him.”

The Chairman TCP granted contracts to Sadan General Trading of Dubai, Yunnan Coal Chemical Industry of China and Sadat Business Group of Dubai. Interestingly all three companies defaulted on their commitments.

The companies which defaulted were awarded contracts to import sugar at prices ranging from a minimum of $488 to $588 per metric ton (MT). However, after the companies defaulted, the TCP awarded new contracts at a price of at least $790 per MT.

Total losses due to non-performance of 300,000 MT is $73.25 million or Rs. 6.23 billion. Exactly who is responsible for the decision which caused a loss of Rs. 6.23 billion to the national exchequer?

Interestingly, the GM Import of TCP had written a letter on May 5 warning against giving contract to Yunnan Coal Chemical Industry of China which did not have the requisite three years experience and no past track record of supplying sugar.

The objection was over ruled by Chairman TCP in his hand written note of May 14, directing that the company should be provisionally approved “as all the documents were verified by Pakistan Embassy in China.

In an interview on the “Reporter,” Chairman TCP, Anjum Bashir, said the Ambassdor in Beijing had recommended the TCP to shortlist the Chinese company which dealt with coal and had no previous experience of supplying sugar. Was the embassy staff in Beijing also involved in the game plan to mint money by recommending a company dealing in coal which had no prior experience of supplying sugar?

Who are the people who benefited by buying sugar at $790/Mt instead of $488/MT or even at $598/MT?

Interestingly, Chairman TCP said during an interview with Arshad Sharif on “Reporter” that the Economic Coordination Committee of the Cabinet had not taken any disciplinary action against anyone who could have been involved in causing loss of atleast Rs6 Billion to the public kitty through a wrongful decision for import of a daily use item like sugar.

Documents show that government has approved subsidy of Rs. 25 billion for the Utility Stores Corporation of Pakistan.

Despite the government subsidy, the Utility Stores Corporation of Pakistan is facing cash gap flows of Rs. 900 every month for supplying sugar at less than market rates to the consumers.

If one considers the list of all the politicians who are listed as directors of different sugar mills in the country, including from PML-N, PPP, PML-Q and other parties, it is not difficult to fathom why artificial shortages are created and why companies which cannot fulfill the tenders for supply are short-listed to create artificial price hike in the country. Will anyone be held accountable for causing loss of Rs. 6 Billion to the national exchequer through a wrong and arbitrary decision? Your guess is as good as mine.

Arshad Sharif is the Islamabad Bureau Chief of DawnNews. He tweets at http://twitter.com/dawntvreporter and can be found on Facebook.

The views expressed by this blogger and in the following reader comments do not necessarily reflect the views and policies of the Dawn Media Group.

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