Urea import via Gwadar: TCP accused of paying Rs 347.16 million 'extra' to cartel

[LahoreEstate]

ISMAIL DILAWAR
KARACHI (February 28 2009): The Trading Corporation of Pakistan (TCP) has allegedly formed a cartel of stevedoring companies, transporters and shipping agents to which it has paid around Rs 347.16 million "extra" for handling and transporting the 330,000 tons urea imported by the government in December-January 2008-09 via Gwadar Port.

According to sources, the corporation was disregarding Public Procurement Rules, 2004 (PPR-2004) in the procurement of services for handling and transporting the imported commodities, such as wheat, fertiliser, sugar, rice, etc, which was paving way for irregularities.

They said as per sub-clause (i) of clause (b) of Rule 42 of PPR-2004 it was mandatory for all procuring agencies, federal government ministries, departments, corporations and authorities, to advertise all procurement requirements exceeding the prescribed financial limit (over Rs 100,000).

But, the TCP was neither advertising nor conducting open tendering not even inviting rates from the bidders through an open competitive bidding for the procurement of services, the sources claimed. They claimed that in December 2008-January 2009 the TCP had awarded a contract to three stevedoring companies for the handling of 330,000 tons of imported urea at Gwadar Port at an exorbitant rate of Rs 1,144 per ton.

While rates for the stevedoring job at Karachi Port and Port Qasim stand at Rs 442 per ton only, the sources claimed. The stevedoring work includes shifting of cargo from ship to shore, ground handling on berths, storing, packing in bags and loading on trucks/trailers.

According to sources, the TCP had paid Rs 702 per ton or 61.36 percent as "additional" (Rs 231.66 million in total) to the stevedores, who had been hired either through negotiations or the invitation of quotations from them, thus in violation of PPR-2004. Besides, an additional Rs 115.5 million (Rs 350 per ton) contract for "ground handling" had also been awarded to a transport company that, according to the sources, was a blue-eyed firm of the officials on the helm at TCP.

The sources said the transgression of PPRA 2004 by the TCP in favour of its cartel had cost the exchequer at least Rs 347.16 million in total. Similarly, if remained unchecked, the TCP's non-transparent method of awarding contracts to other service providers in violation of PPRA rules may cause colossal loss to the country's already ailing economy, the sources warned.

They also claimed that the three stevedoring companies, who had made a cartel with TCP from which they were charging Rs 700 per ton extra, were not paying 16 percent GST in Gwadar. The total cost of transportation of equipment to Gwadar and back to Karachi was not more than Rs 4 million (Rs 12 per ton only), they added.

They said despite double salaries and accommodation facilities to the skilled labour from Karachi the cost would not exceed Rs 20 per ton level. The source said that at KPT and PQA the stevedoring contracts were inclusive of "ground handling" contract that was "additionally" awarded to a haulier firm at Rs 350 per ton.

Earlier, TCP Chairman Mohammad Saeed informed Business Recorder that the payment of extra charges was necessary in "abnormal" situations, like imports through Gwadar Port, where nobody was ready to provide services on normal market rates

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