Trading Corporation faces severe financial crisis

ISLAMABAD: Owing to non-payment of dues by the country’s four provinces, Azad Jammu and Kashmir (AJK), Gilgit-Baltistan (G-B) and other institutions, the Trading Corporation of Pakistan (TCP) is facing the threat of bankruptcy.The dues of commercial banks owed by the TCP stand at more than Rs113 billion. To solve the financial crisis, the Commerce Division has contacted the finance ministry, asking it to deduct the amount owed to TCP through the federal adjuster from the allocated budget of all provincial governments, G-B, AJK, security services, Utility Stores Corporation, National Fertiliser Marketing Limited and other institutionsEconomic crisis successfully overcome with help of friendly countries: UmarIn this regard, a summary, prepared by the Commerce Division, has been sent to the Economic Coordination Committee (ECC).As per documents available with The Express Tribune, the summary states that all provinces and the above mentioned institutions are defaulters of billions of rupees of the TCP. The summary added that despite repeated requests, the dues were not being cleared by the departments, due to which financial crisis at the corporation was deepening.It was further stated that to continue its operations, the TCP, on the guarantee of the government, had borrowed billions of rupees from commercial banks. As of September 30, 2018, the outstanding loans acquired by the TCP from banks had surged to Rs113.711 billion.Of this, the principal amount was Rs47.143 billion, but due to non-payment of dues on time, the total amount had surged exponentially because of accumulating interest payments. Owing to this, the government of Pakistan has to pay interest of Rs8 billion annually to commercial banks.Despite repeated attempts, Commerce Division spokesman Mohammad Ashraf was unavailable for comments.Speaking on the issue, TCP Chief Financial Officer Sohail Rajani told The Express Tribune that due to non-payment of dues by the provinces and institutions, the TCP’s debt owed to commercial banks had surged significantly. He added that a summary had been sent to the ECC by the Commerce Division, seeking recovery of dues from the provinces and institutions through deduction at source from their allocated budgets.The summary added that provincial governments and institutions had to pay arrears of billions of rupees for wheat purchase since financial year 2004-05, which despite repeated requests were not cleared.was stated that a directive should be given immediately to the Utility Stores Corporation and National Fertiliser Marketing Limited for clearing the outstanding bills of TCP amounting to Rs36.7 billion. Utility Stores Corporation owes Rs27.42 billion for sugar purchase while National Fertiliser Marketing Limited has to pay Rs9.275 billion for fertilisers. TCP is a state company that ensures the availability of essential commodities and price stability in the market

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