ISLAMABAD (January 03 2004): Trading Corporation of Pakistan's (TCP) failure to make payment to sugar millers for 100,000 tons sugar has brought the understanding between the government and Pakistan Sugar Mills Association (PSMA) on the verge of collapse.

The new situation, if it continues, may create another serious crisis.

The mill-owners have formed two pronged strategy to cope with what they call 'backing out' by TCP from its commitment of making payments to the millers within three days of lifting the commodity. On the one hand, the central office of Pakistan Sugar Mills Association has taken up the matter with Commerce Minister Humayun Akhtar Khan and demanded immediate release of 
payment by the TCP to keep the ball rolling and, on the other, the PSMA zonal offices have called meetings to consider the matter and work out strategy for future line of action.

PSMA chairman Iskander A Khan has conveyed to the Commerce Minister that TCP is not honouring its commitment of making payment for the commodity bought in November last year, which is tantamount to negation of the understanding between the government and PSMA as well as against the spirit of the government policy to the industrialists relief by purchasing some 
portion of the surplus stocks.

Sikander's letter said: "We wish to bring to your notice that the TCP has not made payments to the millers for the commodity purchased from them in November 2003, which is a cause of serious concern to them."

The letter added that the TCP was making impractical excuse to hold back payments of the mill-owners like demand of separate stacking of procured commodity in 500 tons lots.

Sikander observed "We hope that you, at this juncture of time when crushing is at full swing and stocks are accumulating it becomes next to impossible for the mill-owners to stack small piles in limited godown, would take immediate action to save the industrialists from TCP injustice and ensure them payments so that they could continue with their crushing plan.

It's, doubtlessly, difficult situation for the mill-owners who were depending on payments from TCP for their working capital. 
Its another repercussion would be delay in payment to the growers."

The PSMA chairman has referred to the Commerce Minister the list of the mills whose payments were held back by the TCP.

It includes Kamalia Sugar Mills Limited, Shakhoo Sugar Mills Ltd, Al-Abbas Sugar Mills Ltd, Husein Sugar Mills Ltd, Army Welfare Sugar Mill, Kaslunir Sugar Mill Ltd, Ittefaq Sugar Mills Ltd, Hasseeb Waqas Sugar Mills, Abdullah Sugar Mills Yousaf Sugar Mills Ltd, Punjab Sugar Mills Ltd, Phalia Sugar Mills Ltd, Fatimia Sugar Mills Ltd, Chashma Sugar Mills Ltd, Larr Sugar Mills Ltd, Shah Murad Sugar Mills Ltd, Dewan Sugar Mills Ltd, Karachi, Brother Sugar Mills Ltd, Crescent Sugar Mills Ltd, Gogra Samundri Sugar Mills Ltd, Fauji Foundation Pakistan and Shakarganj Mill Ltd.

When contacted for comments the PSMA Secretary General K.A.Qazalbash said the delay in payment by the TCP was a question mark for the policy makers in Islamabad who were a party to the understanding between the parties.

Qazalbash said: "It's matured time for the TCP to procure the second installment but non-payment of the first installment to the millers have made the entire procedure doubtful".

Courtesy Business Recorder