November 28, 2005	Monday	Shawwal 25, 1426

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MULTAN, Nov 27: The Trading Corporation of Pakistan’s decision to award contracts for the import of 300,000 tons of urea reportedly at higher rates has prompted the farming community to know whether the price difference will be accounted as ‘subsidy to growers’.

In a statement here, Farmers Vision Forum chairman Khwaja Muhammad Shoaib said that there was a difference of almost Rs 1.5 billion or US$ 25m on account of the subsidy — if one calculates it at the price the TCP has awarded contracts and the revised offer of one of the bidders who took part in the tenders called for the purpose.

He said the FVF however did not think that the difference be assumed as the subsidy to the farm sector. “The growers are at loss to understand why the TCP has gone for the higher rates at the cost of the exchequer,” he added.

He said the additional amount of Rs 1.5 billion could be spent on subsidizing other farm inputs like electricity and fuel to reduce the growers’ cost of production. “The sum can also be added to the resources desperately needed for the rehabilitation of the earthquake victims,” the FVF chairman said.

It may be added here that the TCP had invited bids on Oct 26 last for the import of 75,000 tons of Urea. Some 14 firms took part in the tenders opened on Nov 8 quoting rates ranging between $234 to 289 per ton. The Purchase and Price Evaluation Committee of the TCP awarded contracts at $270.5 per ton, that too, for the import of 300,000 tons to five firms.

The bids quoting rates less than that of the approved ones were discarded under the excuses they have “not applied for pre-qualification; company profile is not convincing or doubtful; company is not a regular trader of urea and does not enjoy global reputation as a urea supplier; and, the firm is defaulter with TCP in any previous tender”.

Perhaps, frustrated with the TCP decision the firm which had tendered the lowest bid of $234 per ton further revised its offer down to $200 per ton in a communication sent to the authorities in federal agriculture, finance and commerce ministries.

A spokesman for the firm, Lab Link Enterprises, also claims that his firm cannot be disqualified for any of the four reasons the TCP has cited while rejecting the bid. He says the firm has recently supplied 300,000 tons of urea to Burma, it has applied for pre-qualification and that it has successfully transacted with the TCP in some other contracts.

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