TCP withholds Rs2b of cotton ginners

KARACHI - The Trading Corporation of Pakistan (TCP) has withheld around Rs2 billion of cotton ginners due to financial crisis, The Nation learnt on Wednesday. Some cotton ginners had sold 125,000 bales of raw cotton to TCP during December of 2008, but the state-run organization had not yet paid the dues to the ginners. It may be noted here that federal government involves the TCP to purchase raw commodity from the ginners to control the price mechanism and to ensure availability of the commodity for the textile industry. A representative of Pakistan Cotton Ginners Association while talking to The Nation informed that TCP had purchased 0.125 million bales of raw cotton from ginners, but the TCP had not made payment to the ginners. The TCP purchased all the cotton at the rates of over Rs3200 per 37.32kg and it was exportable quality, he said. All the cotton quantity purchased by TCP was dry, sound, in merchantable condition while free from foreign matter, damage, stains, admixture of old or interior crop of nay description; he pointed out. He said that delay in the payment of TCP was violation of contract signed between the state run organization and cotton ginners association which clearly said the ad hoc payment of 90 per cent would be made by the buyer (TCP) after arrival of commodity at TCP warehouses on the basis of 4.5 maunds (167.96kg) of per bale or average of 10 per cent "katla" weighment carried out at ginning factory by the procurement agent/in-charge. However, the balance of 10 per cent payment will be made within 30 days of arrival of the total contracted quantity at TCP's warehouse after assessment of quality while transportation charges as determined by TCP will be paid after finalization of accounts on presentation of bill. Briefing the bullet points of contract signed between cotton ginners and TCP, he said the initial quality check report will be made by TCP classer and it will be countersigned by incharge procurement centre. The final quality check will be made at TCP warehouse by TCP in presence of Pakistan Cotton Ginners Association. Adequate arrangements for picking of polypropylene, polythene, twine, cloth, wrappings, yellow stains and other admixtures from seed cotton prior to ginning will be made by the seller at his own cost. It may be mentioned here that the transit insurance of cotton from factory to TCP storage points shall be arranged by the seller (ginner) while insurance for the cotton bales stored at TCP's storage points from the date of arrival would be arranged by the buyer (TCP). When contacted by The Nation, Imtiaz Shaikh General Manager Cotton at TCP confirmed that the payment of amount had been delayed by TCP to ginners. He also admitted that TCP had to pay 90 per cent of the total amount after arrival of cotton at warehouses of TCP but due to shortage of liquidity in banks, the payment had been delayed. He informed that 50 per cent bills of cotton ginners had been completed and hoped that payment to ginners will be started very soon.

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