ISLAMABAD, July 21: Pakistan on Wednesday approved major relaxations in tender and laboratory testing specifications for the import of one million tons of wheat for buffer stock , following threats from prospective bidders to stay away from the process, it was learnt.
The relaxations were made by the economic coordination committee (ECC) of the cabinet on the recommendations of the ministry of commerce based on the response from around 20 bidders from Canada, US and Australia at a pre-bid meeting arranged by the Trading Corporation of Pakistan recently, a cabinet member told Dawn in a background discussion.
The most important relaxation is the condition on which the wheat import from Australia a few months back was rejected. Now, the government would accept certification for grade and quality as well as quarantine issue by the agencies and authorities of the US, Canada and Australia and not by the laboratories in Pakistan.
The commerce ministry also took the stand that since ministry of food and agriculture has been importing wheat on the basis of supply country specifications and inspections for years before 2000, the imports now should not be subjected to local laboratories' testing in view of the fact that wheat import was required expeditiously and urgently.
In the US and Canada, the inspection for grade and quality is done by government agencies like federal grain inspection services and Canadian Grain Commission respectively. For quarantine also, the testing is done by government agencies- Animal and Plant Health Inspection Service (APHIS) and Canadian Food Inspection Agency (CFIA).
Australian Wheat Board, though a private limited company, is however, the sole bulk exporter of wheat from Australia under their Wheat Marketing Act of 1989. It has its official testing laboratory - Agro-based Technology - which is independent and all major pre-shipment inspection agencies like SGS and ITS also utilize their services.
The certification of wheat by AFT are accepted by wheat importing countries like Egypt, Iran and Iraq, etc. Quarantine requirements or tests are, however, conducted by the Australian government's department of agriculture, fisheries and forestry (AFFA).
"The specifications as well as inspection and testing procedure prescribed in the tender will, on the one hand inhibit/stall such import and make it more expensive on the other", the commerce ministry had informed the ECC.
As such, the ECC approved to relax specifications, but without compromising on grade and quality, to the extent of the standards on which wheat had been imported in the past (before 2000) from the US, Canada and Australia. The quarantine requirement of Pakistan will however remain in place.
The ECC also allowed Pakistan's pre-shipment inspection agents (PSIs) to carry out tests in another laboratory as well, which was disallowed earlier. It also extended the date of opening of the tender for the import of first tranche of 500,000 tons of wheat till Saturday, July 31, 2004 as certain terms and conditions of the tender will require amendments/revisions and communication to the bidders giving them time to bid on revised terms.
It also decided to issue the next tender for import of 500,000 tons (second lot) after the award of the first tender but not later than August 8, 2004. Pakistan's condition for specification are now that wheat should be free from Tilletia Indica (Kurnal Bunt) and Tilletia Walkeri, on which the US and Canada have no concern. Australia has, however, asked for the removal of Tilletia Walkeri from the specifications as they will not be able to certify its non-presence.
This was rejected by the ECC, because Tilletia Indica was found in their wheat which was rejected in February this year. The ECC also rejected an Australian demand for not asking it to submit performance guarantee.
The ECC was informed that as many as 30 intending bidders including 20 foreign parties had purchased the tender documents from TCP, which was earlier scheduled to open the tenders on July 24.
The meeting was told that bidders had termed the prescribed procedure of sampling and testing in Pakistan as unusual, unconventional and cumbersome and was against the norms of international trade. Besides, it will take a minimum of 15 days from the time samples are drawn and tested in Pakistan and the arrival of vessel at the port.
The silos cannot be allowed to remain sealed and inoperative for that much time. With this condition in place, it was apprehended that either there may not be any bids or if there are, they will be at a price much higher than normal. This will also delay the arrival of wheat in Pakistan.