The Senate Commerce Committee on Thursday called for assurance from the Trading Corporation of Pakistan (TCP) (Pvt.) Limited that no imports outside of the mandate of the TCP should be made.
The committee also recommended introducing the bifurcation of the procurement plan into regular and emergent so that the items could be procured at minimal rates. The committee was also apprised that the private sector’s import of commodities imported by the TCP is not banned, but the exemption of taxes and heavy government subsidy does not make it feasible for the private sector to import the same.
The Chairman TCP apprised the committee that the TCP makes procurement for food security and industries for urea and mainly deals with the import of wheat, sugar, and urea to respond to emergencies. The TCP presented proposals for permanent exemptions from limitations on splitting tenders, a 30-day response time, a 15-day hoisting time before approval for inviting objections, matching bids, a limitation on negotiations, and a 15 percent repeat per cap. The TCP also proposed lemmatizing procurement quantity and time indicators based on harvesting season.
The committee met on Thursday under the chairmanship of Zeeshan Khanzada and received a detailed briefing on the workings of the TCP, with a focus on its role in a post-flood scenario. The Chairman TCP briefed the committee that the TCP is fully owned by the government of Pakistan and is financially independent, i.e., it does not receive any budgetary grant from the Federal Government, and the Federal Government determines when the TCP should import.
The TCP informed the committee that it invests 80 percent of its funds in government securities (T-Bills, Treasury Bills, and PIBs), whereas 20 percent of its funds are invested in term deposits and daily products. The Chairman Committee inquired on the role of the National Fertilizer Marketing Limited (NFML), to which the TCP replied that the NFML is a distribution network and does not deal in procurements.
It was also informed that the TCP distributes sugar, wheat, and urea to utility stores and the NFML. The Chairman TCP showed concern over the debtors in 2018 as per the subsidy audit and apprised the committee that the Utility Stores Corporation (USC) and NFML are the highest debtors by Rs. 51.1 billion and Rs. 24 billion, respectively.
The TCP said that the debtors do not return the money, which has reached a total of Rs. 91.7 billion, including principal and markup amounts. “If it remains so, it will end up in the Public Accounts Committee,” said Senator Saleem Mandviwalla. The committee recommended that the funds should be extracted through the provincial budget and recommended writing letters to the Finance Ministry and redressing the matter.
The TCP informed the committee that, as per the audit report for 2021–2022, the TCP generated Rs. 2.3 billion in profit after tax and, as per the audit report for 2020–2021, paid Rs. 200 million in dividends to the government. The TCP also gave a brief on the incomes and expenses, which were Rs. 4,4 billion and Rs. 1 billion, respectively.
While reviewing the overview of the company, the committee was apprised that, for June 30, 2021, the paid-up capital was Rs. 1 billion and the comprehensive income was Rs. 1.517 billion. The revenue streams comprise commission income on commodity trading, investment income, rental income from go-downs, and rice inspection fees. The commodity procurement is financed through cash credit limits from commercial banks, and until the money is collected from the recipient of goods, the markup keeps on accruing on the bank borrowings.
Discussion on Pakistan-Canada bilateral trade was also entailed in the meeting. The committee included the president of the Pakistan Western Canada Trade Association (PWCTA), the president of the US-Pakistan International Chamber of Commerce (USPICC), and the Commercial Counselor of Toronto, who made proposals and recommendations to improve exports to Canada and through Canada to other countries.
The PWCTA representatives promised to support the Ministry of Commerce in this regard. The USPICC also anticipated support for proposals for tariff, taxation, and duty structures. The Ministry recommended participating in various expos conducted in the country and evaluating the products, availability of the market, consolidation, and mechanisms.
The committee also recommended the Trade Development Authority Pakistan (TDAP) play its effective role and its upcoming participation in the Sial food fair, (food and Beverages at Toronto and collision Canada (It/ITes). The ministry presented that Canada had an import market of $490 billion in 2021.
The meeting was attended by Senator Fida Muhammad, Saleem Mandviwalla, Nuzhat Sadiq, and Senator Abdul Qadir. Senior officials from the ministry, the TCP, and other relevant departments were in attendance.
