ISLAMABAD: The Public Accounts Committee (PAC) on Wednesday decided to ask the Economic Coordination Committee (ECC) of the cabinet to stop advance payments to sugar mills after the Trading Corporation of Pakistan (TCP) revealed that six mills owed it Rs2.65 billion.

Commerce Secretary Younis Dagha informed a meeting of the PAC that the TCP had moved court against the defaulting sugar mills.

According to an audit report, Tandlianwala Sugar Mills, owned by Humayun Akhtar Khan, is the biggest defaulter with an outstanding amount of Rs1.15bn, followed by TMK Sugar Mills, owned by Mohsin Tabani, with Rs640.74 million, Abdullah Sugar Mills Limited Rs510.64m and Sehri Sugar Mills Rs150m.

TCP informs PAC six mills owe it Rs2.65bn

The commerce secretary said the funds had been transferred to the sugar mills under the head of ‘advance payments’. He said the matter related to the advance payments to the six sugar mills had been referred to the National Accountability Bureau (NAB) for inquiry.

He said the bank guarantee of only 10 per cent of the total amount had been recovered from these mills, adding that the recoverable amount had reached Rs2.051bn, including markup and interest.

The advance payments had been made by the TCP to Abdullah Sugar Mills (Depalpur), Abdullah Sugar Mills, Haseeb Waqas Sugar Mills, TMK Sugar Mills, Seri Sugar Mills and Tandlianwala Sugar Mills for the purchase of sugar in 2008 and 2009. After the mills failed to deliver the contracted quantity of sugar, the TCP filed a case in the Sindh High Court for the recovery of the amount.

Mr Dagha told the PAC that the contracts had been granted to these sugar mills under terms of reference approved by the then ECC.

At this, the committee sought details from NAB about its inquiry into the scam.

TCP chairman Sheikh Mushtaq informed the PAC that the Utility Stores Corporation and National Fertiliser Marketing Limited had remitted Rs217m and Rs237m, respectively, to the TCP for supply of sugar, wheat and urea. He said an amount of Rs45.5bn, out of total Rs50.6bn, had been recovered from various organisations since 2013.

The PAC directed the commerce ministry to submit the export policy and details of last three years’ sugar export at the next meeting of the committee.

The commerce secretary informed the committee that the export quota was granted to sugar mills on a first come, first served basis.

Published in Dawn, August 24th, 2017