Cabinet division objects to granting exemption in urea import bypassing PPRA
The Cabinet Division objects to granting an exemption for the import of urea on a G2G basis, bypassing PPRA.
The cabinet division had observed that in case of an international tender for procurement of urea if any exemption from PPRA rules was required, prior consultation with the concerned authority i.e. PPRA was required in terms of rule 18(4) of Rules of Business, 1973 while placing the matter before the ECC, which was not done in the instant case.
The Cabinet Division stated that any such exemption should be obtained as per the laid down procedure.
The federal government has decided that Provinces will have to share a 50 percent subsidy on the import of urea to meet urea requirements for Rabi Season 2022-23.
Moreover, the government has also decided that only those provinces shall be provided subsidies that give their due share in the cost of imported urea besides the federal government.
The government has allowed the Trading Corporation of Pakistan (TCP) to explore the option of 0.3 million metric tons of urea on the government to government basis to meet the urea requirement for Rabi Season 2022-23.
According to officials of the Ministry of Industries and Production meeting of Fertilizer (FRC) was held on September 5, 2022, to discuss the Urea demand/supply for Rabi Season 2022-23.
FRC after detailed deliberations with all the stakeholders, comprising of representatives from concerned Federal Ministries, Provincial Agriculture Departments, and fertilizer manufacturers decided to import 300,000 MT of Urea fertilizer.
Ministry of Industries and Production submitted the proposals for consideration and approval of the ECC in a recent meeting.
It said that the Trading Corporation of Pakistan (TCP) may be allowed to initiate the process for import of 300,000 MT of Urea on a G2G basis and also float tender of the same quantity to be imported from abroad, simultaneously.
The decision to accept or reject offers received on a tender/G2G basis may be taken by the ECC of the Cabinet. TCP would invoke rule 5 of PPRA, 2004 in event of G2G procurement as approved by the Cabinet. .
In the case of an international tender, exemption from rules 8,9,13,35,38, and 40 of PPRA Rules, 2004 is required for TCP to ensure procurement of urea in the shortest possible time frame and in line with the request of TCP.
It also proposed that subsidies on subject imports be shared between Federal and Provincial Governments on a 50:50 basis.
Options for Urea import
Secretary Industries & Production sought permission from the economic coordination committee that TCP is allowed to explore G2G options for the import of Urea in the first instance and subsequently through international tender.
It was further suggested that the Ministry of National Food Security & Research should prepare a report analyzing the availability of essential stocks with PASSCO, including the mechanism for price monitoring.
The Economic Coordination Committee (ECC) of the Cabinet considered the summary submitted by the Ministry of Industries and Production regarding the “Urea Fertilizer requirement for Rabi Season 2022-23” and allowed the Trading Corporation of Pakistan (TCP) to initiate the process for import of 300,000 MT of Urea on G2G basis in the first instance.
In case of no response, TCP will float tender of the same quantity to be imported from abroad.
ECC will take the decision to accept or reject offers received from G2G or on a tender basis.
TCP would invoke rule 5 of PPRA, 2004 in event of G2G procurement as approved by the Cabinet.
In the case of an international tender for procurement of urea, as requested by the Ministry of Industries and Product for exemption from rules 8,9,13,35,38, and 40 of PPRA Rules, 2004, it will be solicited from PPRA/Federal Government.
It further decided that the Ministry of Industries & Production will hold consultations with the provinces so that the Federal Government is informed about their plans on cost sharing of imported urea between the Provincial Governments and the Federal Government. Subsidy on subject import to be shared between Federal and Provincial Governments on a 50:50 basis.
