MULTAN, Feb 18: Tenders for the import of 50,000 tons of urea, which were postponed by the Trading Corporation of Pakistan at the eleventh hour on Feb 13, are now likely to be opened on Monday (Feb 20).
The TCP authorities have given no explanation for postponing the tenders in an odd manner just a couple of hours before the scheduled time for opening of the bids submitted by some 13 urea importers.
Sources at the TCP said that only those 13 firms were informed about the new date that had submitted their bids for the tenders deferred on February 13. The TCP had to call tenders for the import of 50,000 tons of urea when some firms had failed to deliver the contracted amount reportedly because of the short period given to them to accomplish the task.
In the last tender of December 2005, the TCP had called for the import of 75,000 tons of urea, and the intended importers were asked to unload the contracted amount at the Karachi Port by January 10, 2006. The tender was opened on December 22 and under the procedure of acceptance of the contract and submission of 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. The tendered quantity was equally distributed among three importers. Of them, only one importer could deliver the consignment but allegedly after getting certain amendments in L/C, shipment and delivery clauses of the agreement.
One of the firms, Lab Links Enterprises (LLE), which could not perform within the given period, had urged the TCP authorities before opening of the tenders to restore the original terms and conditions viz-a-viz shipment/delivery, as the terms introduced in the tender were in contravention of the terms and conditions laid down in the preceding tenders.
Under the TCP’s terms and conditions, 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. LLE had offered the lowest price of $234, but the contracts for the import of 300,000 tons of fertilizers were awarded at a higher price of $270.5 per ton to some other firms.
LLE had further reduced its offering price to $200 per ton. Although LLE was awarded an import contract of 25,000 tons, the TCP authorities remained stick to the condition that the consignment should be delivered by January 10 at the Karachi Port. The contracts for the rest of 50,000 tons were awarded at $254 per ton.
Talking to Dawn, LLE chief executive Arshad Awan said that his firm was still willing to supply urea at $200 per ton to the TCP (or the government of Pakistan) under the shipment schedule laid down in the preceding and following tenders.
The government imports urea every year to bridge the gap between local production and demand and, according to Agriculture Minister Sikander Hayat Bosan, provided a subsidy of around Rs700 per 50kg bag to the growers. Analysts say that the government can reduce its spending under the head of ‘urea subsidy’ by either making transparent the process of contract allocation at the TCP level or handing over the task completely to the private sector as is done in the case of wheat import.
Prices of imported wheat have now been rationalized at around $140 per ton as against $200 or even more when import of the commodity was in the hands of the TCP.