ISLAMABAD : Trading Corporation of Pakistan (TCP) is said to have inflicted financial loss of Rs over Rs 6 billion to the national exchequer by importing inferior quality urea.
According to audit report 2023-24 shared with the National Assembly, as per contract between Trading Corporation of Pakistan and M/s Sinochem Fertilizer Co. Ltd, the physical condition of urea would be white, free flowing granular.
During audit of Trading Corporation of Pakistan (HO) for the year 2022-23, it was observed that the management signed an agreement with M/s Sinochem Fertilizer Co. Ltd for import of 100,000 Mt Granular Urea (two lots of 50,000 each) at USD 500 per M.T on July 13, 2022. Second Lot having total Quantity 50,525 MT was loaded at TIANJIN Port, China with bill of lading on September 21, 2022.
The management appointed M/s COTECNA China, as Pre-Shipment Inspection Agency (PSIA) which in its report on September 21, 2022 resolved that foreign material like steel scrap/ string of bags / bags fibers on the surface of cargo pile was found. The vessel arrived on October 14, 2022 at Karachi Port. The management appointed M/s. Joeph Lobo Pvt. Ltd as first Surveyor and then carried out the Joint Cargo Condition Survey as well. Both Surveyors gave remarks that the cargo was hard and lumpy and cargo was found with exceptionally compressed condition and with foreign material (cloths, PP bags & threads etc. mixed with cargo).
The PNSC, in an email of September 15, 2023 also intimated that most of cargo was caked / poor in quality, in order to Issue Clean Mate Receipt & B/L, TCP/ shipper to discharge all poor quality urea and to stop loading due to poor quality cargo. Further, the supplier in an email on September 17, 2022 informed that all their cargo at Tianjin Port was railed in and stored in the warehouse in August. The shipper also unloaded some caked cargo at the load port and loading remained suspended on September 15-16, 2022 and which was resumed on September 17, 2022. The vessel of 22 days long voyage period from the Chinese Port to Karachi and the hygroscopic nature of cargo, it became lumpier and turned into stony.
The matter was taken up with the supplier and supplier agreed to bear Rs 300 PMT as extra stevedore cost at loading port due to non-free flowing condition of the urea. Subsequently, the Stevedore i.e. M/s Ocean Maritime Pvt. Ltd claimed agreed charges i.e. 49,987.880 M/Tons @ Rs 300 M.T = Rs 14,996,364 through invoice dated November 04, 2022, an extra cost of Stevedoring & Handling Charges of Hard, lumpy & stony cargo.
The M/s. National Fertilizer Marketing Limited (NFML) who was a recipient party for receiving consignment informed the management vide letter dated October 18, 2022 that their monitoring Team at KPT also found out that the urea was in very hard, stone-like lumpy and in dirty condition and urea was not in free flow condition and contains other materials like cloth, iron, torn out bags etc. which is not admissible to NFML since such urea is not preferred by farmers and could defy the objective of provision of subsidized Urea to the farmers.
Audit is of the view that the management imported urea in lumpy and stony condition which was against the tender specifications and no action was taken against the supplier. Thus, the payment of Rs 6,187.912 million on import of urea being poor in quality stands irregular / unjustified.
The matter was reported to the management on November 28, 2023. The irregularity was discussed in the DAC meeting held on January 16, 2024. The management informed that PSQCA eventually certified that cargo was found free flowing and inconformity of standards and the same was also confirmed by M/s NFML which received the shipment. TCP also got internal inquiry conducted which verifies that the extra charges by the stevedore was not accepted by the TCP. DAC directed the management to submit documentary proof of no extra payment / adjustment being made to supplier on account of dispatch money, dispatch money statement vessel vise, complete status of the L/C retired and payable and receivable status of the supplier i.e. M/s Sinochem, to Audit.
Audit has recommended implementation of the DAC directives.
Ends
