KARACHI, May 16: The cement manufacturers have not yet decided on the strategy to respond to the inquiry initiated by the Competition Commission of Pakistan (CCP) that suspected cartelisation in the sector.

Meanwhile, a note critical of the raid conducted at the office of All Pakistan Cement Manufacturers Association in Lahore last month by the CCP was forwarded by the ministry of industries to the Prime Minister office. The note in effect pleaded to direct the commission to refrain from extreme measures as it could further erode the investors’ confidence.

The note forwarded by the PM secretariat to the competition body was returned to the secretariat with a strongly worded counter note explaining the conditions that necessitated such an action strictly under the law.

Highly-placed sources in Islamabad told Dawn that the note was seen at the commission as a signal from the coalition government to leave the powerful private sector players misusing their dominant market position alone. “Imagine the power and the clout of the big boys of the private sector in Pakistan. The change in the government has not affected their ability to influence the government to protect them, their business and their ways of conducting business,” a senior officer, who was instrumental in initiating the inquiry against the cement cartel earlier, told Dawn on condition of anonymity.

An inquiry was initiated at one point during the last government by the National Accountability Bureau against cartels but the same was dropped abruptly on intervention by certain ministers, who were reportedly uncomfortable with such an investigation.

“It would be wrong to see the note -- that was prepared by the ministry after consulting the minister Naveed Qamar and getting explanation of the position from cement manufacturers -- as interference in the working of the commission, Khawaja Shahab, federal secretary industries, told Dawn from Lahore over telephone.

“We have no intention or interest in blocking investigations initiated against market manipulators by the CCP. We, however, felt that raiding the office of a major industrial sector, expanding its capacity and earning much needed foreign exchange through exports, is uncalled for at this point in time,” the secretary said explaining the reason for forwarding the note to the PM secretariat.

Eizaz Sheikh, president All Pakistan Cement Manufacturers Association contested the charge of cartelisation and said their association, like other such bodies, was a platform to resolve common issues of the cement manufacturers, who were managing their business well despite strains exerted by rising cost of inputs.

“We have not done anything wrong so the question of paying penalties to the commission doesn’t arise. We do not want to make an issue that could add to the volatility in an already instable political situation and adversely impact the investment environment in the country already under immense economic stress,” he said.

“The free market can only deliver under competition, all activities that undermine competition, actually leads to under utilisation and exploitation in the market. It is the right of the consumers to get a fair deal in terms of value for their money and liberty to exercise their right of choice, he added.

The profile of the cement sector shows no entry or exit from the sector over the last more than a decade. Besides, signals of arbitrary price fixation by the manufacturers were also reported. To me it was a behaviour not permissible under the law and needs to be checked,” a high ranking officer of the CCP told Dawn.