ECC unearths ''sugar scam''
Economic Co-ordination Committee (ECC) of the Cabinet is said to have unearthed a financial scam in the procurement of sugar by the Trading Corporation of Pakistan (TCP) in 2010 in violation of government directives, sources close to Secretary Industries told Business Recorder.
This scam was disclosed at a meeting of ECC on December 18, 2102 presided over by Finance Minister Dr Abdul Hafeez Shaikh when a summary of Commerce Ministry came under discussion on the disposal of 700 metric tons of imported sugar in the open market. Utility Stores Corporation (USC) had refused to lift "substandard" sugar, arguing that it is not only fine grain but also infested with stones and foreign particles. The sugar is of Indian, Brazilian and Middle Eastern origin and is stocked at the TCP''s Pipri godowns.
The sources said in light of the directive of the ECC of the Cabinet in its meeting on January 12, 2010, TCP imported 1,104,605 tons of sugar from world-wide sources during 2010-11 and the same was stored in TCP Pipri godown. Subsequently, almost all the imported sugar was delivered to Director General Procurement, Pak Army, Pak Navy, Utility Stores Corporation of Pakistan (USC), Canteen Stores Department (CSD). Some of it was also provided to the local market with a view to stabilising its prices.
During a heated debate, the ECC observed that it had allowed TCP to import only 0.5 million tons of sugar while as per documents, TCP imported 1,104,605 tons of sugar. Besides, the ECC in its decision of January 12, 2010 had directed that the average landed cost of sugar should not exceed Rs 51 per kg. and documents revealed that the average landed cost worked out by TCP was Rs 59 per kg.
One of the ECC members said sugar had not been disposed of for the last two years which had caused a loss to the national exchequer and demanded a detailed investigation into the matter. Another view was that in order to avoid further loss to the exchequer, the proposal made in the summary may be approved with the direction to the Ministry of Commerce to present complete details of the case in the next ECC meeting.
The ECC directed the Commerce Ministry to investigate the following: (i) quantity of sugar imported which ECC had allowed for import and the procedure followed for this purpose; (ii) why the average landed cost of sugar exceeded the approved procurement cost of Rs 51 per kg; (iii) for how many years sugar was lying in TCP goodowns and why the case for its disposal was not moved earlier; (iv) the difference between the average landed cost including mark-up and the present estimated sales price; and; (v) What will be the loss to public exchequer and who will bear that loss?
Commerce Ministry in its summary said that in order to resolve the issue, TCP decided to approach USC with a chemical report on sugar, verifying its suitability and fitness for human consumption and Chairman TCP wrote to Managing Director, USC to depute a team of officials to lift the saleable quantity of sugar from Pipri godown. On the request of USC, TCP arranged segregation of "Renuka" brand sugar at a high cost to enable USC to lift maximum bags of their choice. However, the USC still refused to lift sugar stocks. The estimated value (landed cost + interest/mark-up) of 700 tons of sugar works out to Rs 52.26 million. No storage charges are paid as godowns are owned by TCP.
The sources maintained that TCP sent the sample from left over "Renuka" brand sugar to Pakistan Council of Scientific and Industrial Research (PCSIR) laboratories working under the control of Ministry of Science & Technology for examining the suitability and fitness for human consumption and the report received on July 18, 2012 revealed that the sugar is fit for human consumption and also within standard limit of Pakistan Standards and Quality Control Authority (PSQCA) for moisture. According to standard specification of PSQCA, 0.08 percent moisture is acceptable whereas the sugar sample of "Renuka" brand contains 0.046 percent moisture, which is within permissible limit and the stocks are not harmful for human consumption. Apparently, the bags are in good condition except that the cosmetics of the bags have deteriorated due to prolonged storage.
Courtesy Business Recorder - Reviewer: Unknown - ItemReviewed: ECC unearths ''sugar scam''
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