NAB probing 3 sugar mills for not supplying stock to TCP

Islamabad

At least three sugar mills, two of Punjab and one of Sindh, are being probed by National Accountability Bureau (NAB) for not providing sugar to Trading Corporation of Pakistan (TCP) as promised thus causing a loss of Rs3.6 billion to the national exchequer.

The documents available with ‘The News’ reveal that Lahore NAB is probing M Sugar Mills and HB Sugar Mills on the complaint of TCP and Karachi NAB is investigating ASG Sugar Mills for pledging sugar stock reserved for Utility Stores Corporation (USC).

NAB’s documents say that TCP is a state owned commercial organisation working under the administrative control of Ministry of Commerce. The TCP on the directives of Economics Coordination Committee (ECC) of the Cabinet, from time to time during December 2011 till April 2014, has purchased sugar stocks of 1,421,355 MT for delivery to USC and other government entities. The sugar stocks were purchased from various local sugar mills through fifteen tenders floated/opened on different occasions.

“As per tender terms and conditions 100 percent payment was made to all successful bidders/mills after completing all codal formalities. The sugar mills were required to provide labour for the lifting of stocks and to deliver sound and saleable quantity/quality of the sugar round the clock to TCP’s nominated buyer at a minimum rate of 500 MT per day.

During the lifting process, USC has made various complaints that they are facing problems in getting sugar from certain sugar mills particularly the above mentioned three mills, which have either been slow or reluctant to give the deliveries of sugar as per their requirement against TCP’s delivery orders.

Regarding M Sugar Mills and HB Sugar Mills, NAB’s initial probe says that throughout the delivery process, they have been reluctant to give deliveries to USC. “In the beginning they had been giving slow/nominal deliveries which subsequently were completely stopped w.e.f. 03.01.2014. Despite receiving 100 percent advance payment, the sugar mill had not given delivery of a single metric ton sugar to TCP/its nominated buyer USC.

M Sugar Mills and HB Sugar Mills assured TCP through letters that due to torrential rains and thunder storm, the sugar stock had become damp which would be reprocessed during the upcoming crushing season 2013-2014 and as per decision of their technical and production staff, the lifting of sugar to USC would be made by November 2014 but did not fulfill their commitment. The subject sugar mills filed writ petition in the Lahore High Court (LHC). The learned LHC single bench observed that Cane Commissioner was not authorised to issue the letter of enforcement of contract with which it had no concern at all. Consequently petition was accepted and letter impugned in the petition as set aside with no order as to cost. However, parting with this order, it was observed that in case the petitioner mills failed to perform their part of contract and TCP would be well within its rights approached the forum concerned to redress its grievance. The failure on part of M Sugar Mills to deliver sugar stock to the TCP/USC caused loss to national exchequer of Rs890,584,589.

The failure on part of HB Sugar Mills to deliver sugar stock to the TCP/USC has caused loss to national exchequer of Rs1,405,170,738.

Regarding ASG Sugar Mills, the NAB documents say that NAB headquarters received a complaint from Ministry of Commerce against M/s ASG Sugar Mills and others, alleging that the mills failed to provide sugar to TCP/USC as per terms and conditions of tender. The mill pledged stock reserved for TCP with one of the national financial institutions which was clear violation of clauses 10 and 16 of the tender terms and conditions. The amount involved is Rs1311.527 million.