TCP”s tender: 73 mills ready to offload 660,000 tons of sugar
January 15, 2013
In response to Trading Corporation of Pakistan (TCP) sugar procurement tender, aggressive participation was witnessed as some 73 domestic mills have shown interest to offload 660,000 ton of commodity. Following the directives of federal government, TCP floated a gallop tender on December 14, 2013, for purchase of 330,000 tons of sugar from the local mills as they are facing some financial crisis followed by bumper sugarcane crop and slow sales in the domestic market.
As per initial announcement by TCP, January 7, 2012 was announced for tender opening, however it was extended on the demand of the mills and later January 14, 2012 was fixed as final date for submission of bids. Owing to prevailing law and order situation in the city, the tender opening was further delayed by some five hours as several bidders were unable to reach and submit their bids till 11:00 am on January 14, 2012 at TCP office. On the telephonic request of several bidders TCP granted a relaxation of further five hours and bidders were allowed to submit bids till 4:00 pm on Monday, instead of announced 11:00 am with an aim to ensure widest participation of sugar mills.
Accordingly, the tender was opened on Monday at 4:30 pm and as many as 73 parties shown their interest to sale sugar stocks to government-owned grain trader. As per tender terms & conditions, the bidders were required to quote bids for a maximum quantity of 10,000 metric tons in each case and most of the received bids are also for a quantity of 10,000 tons, while some bids are less than the maximum quantity. As against the tender quantity of 330,000 tons, overall bids were received for a quantity of 660,000 tons of sugar supply. This reflects that local mills have sufficient stock of the commodity and sincerely willing to offload their stock to ease their financial problems, sources said.
All 73 mills have offered bids for different quantities and rates ranging from Rs 52,800 to Rs 59,250 per metric ton. Lowest bid was received form two sugar mills i.e. Kamaliya Sugar Mill, TobaTek Singh and Huda Sugar Mills, NanKana Sahib. Both mills agreed to supply 10,000 tons of each at lowest price of Rs 52,800 per metric ton.
Banun Sugar Mill is second lowest, which offered to supply 10,000 tons of sugar at Rs 55,555.56 per ton. Highest bid was submitted by Mirpur Sugar Mill as it offered a price of Rs 59,250 per metric ton for a quantity of 10,000 tons. However, so far no bid has been accepted as the evaluation of received bids is underway, after which the price evaluation committee/tender award committee will review the quoted prices and finalise the deal.
Sources said that Economic Co-ordination Committee (ECC) of the cabinet has already allowed TCP to apply price matching on sugar procurement tender, therefore it is likely that price evaluation committee will offer other bidders to match the lowest price, if the lowest bids will be responsive and according to tender”s term and condition. They said that the received bids were valid for next fifteen working days and its enough for TCP to finalise the sugar procurement with suitable bidder.
“ECC decision of sugar procurement will require a massive amount to ensure timely payment to the sugar mills and as per initial estimate overall some Rs 17-18 billion will be required for the procurement of 330,000 tons of commodity from domestic mills as minimum offer price is Rs 52,800 per tons,” they added. TCP is continuously receiving outstanding payments form different government entities and it is expected the corporation will have sufficient funds, when payment will start.
It may be mentioned here that for the last two years, TCP has been procuring sugar from domestic mills and it”s like a normal operation for the corporation. So far TCP has procured some 678,000 tons of sugar from local mills during last two years and the procured commodity is being sold through Utility Store Corporation (USC) at subsidies rates to facilitate the masses.