Govt okays purchase of fertliser hurriedly

The cabinet's purchase committee in a last minute meeting on the day before Eid holidays approved the purchase of three lakh metric tons of urea fertiliser to avert a potential crisis in December-March.

The proposal to purchase the fertiliser, worth over Tk 700 crore, was placed before the same committee on October 15 but it was rejected. Committee Chairman M Saifur Rahman had asked the industries ministry to re-tender the purchase as he thought the international fertiliser price would go down and a re-tender would make the purchase cheaper.

However, when Prime Minister Khaleda Zia was made aware of this rejection upon her return from Saudi Arabia on October 21, she took the initiative to approve the procurement before the government handed over power to the caretaker government.

The government's delay in taking decisions had led to serious fertiliser crises in the past.

Under the PM's directive, the purchase committee for the first time held its meeting at the Prime Minister's Office (PMO) on October 24 with LGRD Minister Abdul Mannan Bhuiyan in the chair as Saifur was not present. Sources said Bhuiyan took verbal consent from Saifur before approving the purchase.

Fertiliser industry sources said that on October 15 Saifur had taken an ill-informed decision. The urea price is spiralling up. On the other hand, the country's 1.6-million-ton demand for urea during the November-March season needs to be met from different sources.

Bangladesh Chemical Industries Corporation (BCIC) is to procure 2 lakh tons from Kafco, four lakh tons from importers, 2.5 lakh tons from its inventory and the rest from the state's fertiliser factories to meet the demand.

Other than the three lakh ton purchase approval, the government had previously okayed import of one lakh ton urea, which is set to arrive in November.

Under the October 24 approval, the fertiliser will cost around $250 per ton. Summit Group will import two lakh tons and the rest will be imported by other importers.

Sources said a number of these importers, with the help of a section of unscrupulous BCIC officials, had previously delayed delivery of fertiliser to make extra profit. The BCIC tender for fertiliser procurement typically gives the supplier 45 days' time. Earlier this year, the BCIC favoured an importer and gave it six months to supply the fertiliser. The long time allowed the importer to buy fertiliser at a much lower price than its quoted price and make windfall profits. The delay in supply had created a fertiliser crisis earlier this year as well.

"The BCIC will have to make sure it does not give extra time to the suppliers. Extra time will create an artificial crisis and a scope for the suppliers to make more profits," said a source.