February 7, 2006	Tuesday	Muharram 8, 1427

MULTAN, Feb 6: An entrepreneur is leaving no stone unturned in futility to supply imported urea at rates far below the prices at which the Trading Corporation of Pakistan has been awarding contracts to the importers to provide the subsidized fertilizer to the growers.

In October last year, the corporation had invited bids for the import of 75,000 tons of urea under a tender No Imp/Urea-42/05. However, in the end the TCP awarded the contracts for the import of 300,000 tons of urea and that too at the higher rates.

As many as 14 importers had submitted their bids, which were opened on November 8 last year. The prices quoted by the bidders had ranged between $234 and $289 per ton. However, the TCP’s Purchase and Price Evaluation Committee brushed aside the lowest bids.

The bids discarded had offered the import price of per ton urea at $234, $238, $247 and $249. One of the bidders, who had quoted the price at $271.7 per ton, was reportedly convinced to rationalize his offer to $270.5 per ton, and then four of the bidders, who had quoted even higher rates, were made to bring down their prices to $270.5 per ton of urea. Consequently, the five firms were collectively awarded the contracts to import 300,000 tons of urea.

The firm, Lab Link Enterprises (LLE), which had offered the lowest import price of $234 per ton, announced a further reduction in its offering price to $200 per ton and informed the authorities in federal finance, commerce and agricultural ministries that it would deposit a cash security of Rs20m to enhance its credibility, while its principal Rodan United Group (of Dubai) would submit a performance bond of two per cent of the total invoice value within four days of the issuance of contract.

The firm was also ready to bear the expenses for inspection of its stocks in Russia and Ukraine by the government representative(s) anytime for confirmation of the quantity and quality. But, the firm did not receive any response from none of the ministries concerned.

Upon being failed to get any response from the authorities concerned, the firm reportedly submitted its offer to a top government office along with a pay order of Rs20m as surety bond. However, the firm was advised to take part in the TCP tenders to be announced in the middle of December for the import of another consignment of 75,000 tons of urea.

The firm acted in accordance with the advice and purchased documents of the tender No TCP/UREA-50/2005. However, it was surprised to see that the terms and conditions for shipment/delivery period had been changed as against the previous tender.

Under the TCP’s tender invited in October, the successful bidders would have to deliver first consignment of 25,000 tons of urea in 15 days, the second in 22 days, the third in 29 days and the subsequent (if any) in 36 days after opening of the L/C.

But, for the tenders opened on December 22 it was made compulsory for the intended importers to ensure that the entire awarded quantity of urea is delivered at the Karachi Port by January 10, 2006. Keeping in view the laid down procedure of acceptance of the contract and submission of the performance bond, the L/C was due to be opened on January 2; thus, the importers were given only eight days to supply urea in the country.

A source at the TCP revealed that the deadline of January 10 was given on the insistence of authorities in the inputs wing of the federal agriculture ministry as they were of the view that the urea imported after this date would be of no use for the current wheat crop.

Lab Link Enterprises wrote a letter before opening of the tenders to the authorities in the TCP and other related departments that it would not be possible to supply the consignment in the given short period and urged for the maintainability of terms and conditions laid down in the tender No Imp/Urea-42/05.

After being successfully tested for the technical qualification, LLE was awarded a contract for the supply of 25,000 tons of urea at the rate of $200 per ton. The contracts for the rest of 50,000 tons were equally distributed between two other firms at the rate of $254 per ton. LLE and another successful bidder could not deliver their respective contracted amount of urea by the deadline, while the third contractor had performed but allegedly after managing certain amendments in the shipment and delivery clauses.

Interestingly, the corporation reissued tenders for the remaining 50,000 tons of urea on January 29 and the date of February 13 has been fixed for opening of the bids, which means that the urea imports through the contracts issued under the latest tender will not reach the country before the next month of March.

LLE’s chief executive Arshad Awan said that it was ironical that the TCP had taken the matter of import of the required quantity of urea to March, while his firm would have delivered before January 20 if it had been given the opportunity to perform under the rational shipment terms and conditions laid down in the tender No Imp/Urea-42/05.

Mr Awan said although his firm was being discouraged in one way or another to remain at bay from entering the urea import business at the competitive rates it had been offering, his struggle to rationalize import prices of fertilizer had paid dividends in the form of (imported) urea prices coming down to $254 per ton from the last year prices of $312 per ton. He suggested that like wheat the task of urea import might also be given to the private sector. He said the prices of imported wheat had been rationalized around $140 per ton as against $200 or even more when import of the commodity was in the hands of the state-run TCP.