Commodities

Timely import of commodities: Senate panel seeks amendments to PPRA rules

ISLAMABAD: Senate Standing Committee on Commerce has recommended the government to amend PPRA Rules to allow import of commodities well in time and without involvement of third party so that burden of subsidy on imported items may be reduced.

These recommendations were outlined after threadbare discussion on commodity operations of Trading Corporation of Pakistan (TCP) and Senator Salim Mandviwala’s arguments that Petroleum Division is facing the same situation with respect to procurement of LNG.

The meeting was presided over by Senator Zeeshan Khanzada whereas Senator Salim Mandviwala, Senator Nuzhat Sadiq, Senator Fida Muhammad and Senator Abdul Qadir attended the meeting, which started an hour late due to PTI Senators’ protest in favour of “justice for Senator Azam Swati and former Prime Minister Imran Khan”.

Chairman Trading Corporation of Pakistan, Rafeo Bashir Shah, gave a detailed presentation on TCP affairs starting from its inception and current position. He said presently TCP was totally dependent on government business and, at the same time, it was facing limitations in promptly responding to meet the federal government needs.

TCP’s import operations are limited to import of wheat, urea and sugar, rice inspection and certification for Geographical Indications (GI), issuance of certification of authenticity for brown Basmati to EU countries, cotton procurement locally for market stabilization and real estate management.

Import of urea: TCP exempted from PPRA rules

He sought following permissions: (i) pre-qualification of international commodity supplying companies; (ii) exemptions/relaxation of PPRA Rules (Rule 8,9,13,35,38,40 & 42); (iii) permission for intervention in the commodity market at no cost to the GoP, as well as commodities in the private sector for price stabilization; (iv) pre-qualification, qualification and disqualification of suppliers and contractors; and (v) prequalification requirements for procurement of common use items, services and commodities through framework agreement.

Secretary Commerce Sualeh Ahmad Faruqui informed the Committee that timely import of required quantity of commodities has already been raised at different forums but no decision has been taken.

“We have raised this issue (amendments in PPRA rules) at every forum but no one is ready to take this initiative,” said Secretary Commerce.

Senator Salim Mandviwala took the lead and proposed that a letter must be written to the Prime Minister for revision in PPRA Rules so that relevant organisations can be empowered to start procurement process when prices of commodities are low in the international market. He also raised the issue of vintage cars stuck at Karachi Port.

The Standing Committee suggested that it should send recommendations to Standing Committee on Industries for import of urea and Standing Committee on National Food Security and Research for import of wheat.

The issue of outstanding receivables of Rs 91.757 billion – principal Rs 49.146 billion and Rs 42.611 billion mark-up of USC, NFCL, Sindh Food Department, Punjab Food Department, KP Food Department, Balochistan Food Department, Government of Gilgit Baltistan, Government of AJ&K, Directorate General (Procurement) Army and Pakistan Navy also came discussion.

The Committee was informed that if due amount was not paid by the concerned provincial and AJ&K governments and Organisations/ Departments, TCP’s circular debt will increase.

TCP also intends to import DAP through private sector so that its price could be reduced in local market.

The Chairman TCP briefed the committee that the TCP was fully owned by the government of Pakistan, financially independent i.e. it does not receive any budgetary grant from Federal Government and the Federal Government determines when the TCP should import. The TCP informed the committee that the TCP invested 80 percent in government securities (T-Bills, Treasury Bills, and PIBs) whereas 20 percent funds are invested in Term Deposit and daily products.

The Chairman Committee inquired about the role of NFML to which the TCP replied that the National Fertilizer Marketing Limited (NFML) is a distributive network and does not deal in procurement. It was further noted that TCP distributed sugar to the Utility Stores Corporation (USC), USC and PASSCO distributed wheat while NFML distributes urea.

The Standing Committee suggested that Finance Ministry should deduct the amount at source, after taking debtors on board. Secretary Commerce supported the proposal but explained that in the past such efforts remained fruitless.

Discussion on Pakistan-Canada Bilateral Trade also came under discussion at the meeting. President Pakistan Western Canada Trade Association, President US Pakistan International Chamber of Commerce and the Commercial Counselor Toronto participated in the committee and gave proposals and recommendations to enhance exports to Canada and, through Canada, to other countries.

The representatives from the Pakistan Western Canada Trade Association pledged to extend support to the Ministry of Commerce in this regard. The USPICC also anticipated support in proposals for tariff, taxation and duty structures.

The Ministry recommended to participate in various Expo’s conducted in the country and evaluate the products, availability of market, consolidation and mechanism. The committee also recommended TDAP to play its effective role and its upcoming participation in Sial food fair, (food, beverages) in Toronto, Canada. The Ministry noted that Canada was an important market estimated at $490 million in 2021.

The representatives of Pak-Canada Chamber and Pak-US Chamber presented different proposals to increase exports to Canada.

Copyright Business Recorder, 2022

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