Subsidising Corruption

How the USC sells ration for flood victims to Sindh govt at non-subsidised rates

As the process of benefiting oneself at the expense of others continues on a large scale, echoes of widespread corruption are on the rise in the Utility Stores Corporation (USC), a state-owned enterprise that operates chain stores throughout the country that provide basic commodities to the general public at prices lower than the open market because the government subsidises them.

Corruption exists in many sectors of the USC, as evidenced by the purchase of ration bags from the corporation for those affected by the recent rains and floods, after the Sindh government contacted the USC to provide rations to those in need.

These ration bags should have included sugar, tea, flour, pulses, rice, and other goods, and they should have been provided to the Sindh government at subsidised rates by the USC because they were to be distributed to flood victims. However, this was not the case and the bags were provided to the Sindh government at non-subsidized rates. Instead of receiving these ration bags from Sindh, USC officials allegedly adopted a new method, which opened many doors for corruption.

The USC administration directed the Sindh government to procure 80 thousand ration bags from Islamabad, 25 thousand bags from Peshawar, 50 thousand bags from Faisalabad, and 40 thousand ration bags from Sukkur, even though all of these were due for Sukkur. However, some corporation officers issued orders to Islamabad, 958 kilometres away from Sukkur, and Peshawar, 1100 kms away, to provide ration bags, rewarding private transport companies, for which no tender was done and the Public Procurement Regulatory Authority (PPRA) rules were not followed, costing the organisation millions of rupees and awarding favouring transporters despite the corporation pre-qualifying transporters from whom these ration bags could be procured. As many as five hundred bags were loaded on a truck from other cities, including Islamabad and Peshawar.

As a result, 160 trucks were hired to transport 80,000 ration bags from Islamabad to Sukkur, as one truck is only able to transport 500 bags. Similarly, trucks carrying ration bags from Peshawar and other cities were charged exorbitant fares because no tender was issued for this transportation. When Bol News contacted Muhammad Ali Aamir, Managing Director of Utility Stores Corporation of Pakistan, he clarified that we could not provide goods at subsidised rates to the Sindh government, which is a provincial government, if only a small number of ration bags were subsidised.

“There is also a system in place for this, as long as the ration bags are produced in Islamabad or Peshawar.  We didn’t have enough equipment in Sindh at the time, so we attempted to go to the utility zone, which had more food items,” Aamir stated.

He said that the Sindh government had placed a large order of more than 220,000 ration bags, which they had ordered urgently because they needed to supply these bags without any delay.

“So we have taken all possible measures, and the staff of Utility Stores Corporation has fulfilled and is still fulfilling this order on an emergency basis, day and night,” he maintained.

He further stated that in an emergency, the organisation can use private transportation, so private transportation was used. “They requested these ration bags, and we did not have enough time to transport them. We were unable to tender for it, and when these ration bags or any goods are to be delivered on a single day, quotations for transportation are obtained. That is the procedure we followed,” the USC managing director added.

The most important point here is that no concession was given to the Sindh government in the goods put in the ration bag, despite the fact that the same corporation provided five hundred ration bags at a subsidised rate to Dr. Mehreen Bhutto, Member of the National Assembly from Khairpur, and hundreds of ration bags at a subsidised rate to a so-called Bhutto Welfare Organization in Sukkur. The government paid the USC more than one billion rupees in the form of ration bags, but the corporation made no concessions in this relief work for the Sindh government.

The Sindh government received 220,000 ration bags at a non-subsidised rate of Rs76 per kg of flour, Rs91 per kg of sugar, Rs127 per kg of broken rice, and Rs536 per kg of ghee. While these items were provided to Dr. Mehreen at subsidised rates of Rs40 per kg of flour, Rs70 per kg for sugar, Rs70 per kg for broken rice, and Rs300 per kg for ghee. As per reports, more than Rs80.5 million was lost in flour aid. The provincial government also overpaid for sugar by millions of rupees.

At USC, packing charges of Rs120 per ration bag were collected, resulting in the Sindh government paying Rs26.4 million just for packing, despite the fact that all of this packing is done by utility store employees, which cost only Rs20 to 25.

While packing ration bags for Dr. Mehreen, the officers of the corporation’s Sukkur Zone prepared hundreds more bags at subsidised rates, from which the goods were sold in the open market.

While they were being sold, the Federal Investigation Agency (FIA) Sukkur raided and arrested an employee of USC. Following the investigation, the FIA registered a case against Regional Manager Naseer Durrani, Area Manager Aftab Bhutto, while Maqbool Bhatti, an employee of utility stores, was caught on the spot.  He was suspended, but no other officers involved in the case were reprimanded. Shehzad Khan, the USC Zonal Manager, is still on the job. Similarly, no action was taken against warehouse in-charge Mushtaq Mahar, despite the fact that the FIA had discovered the goods taken from the corporation at subsidised rates being sold in the open market and had taken legal action.

The relevant officers were also present in their seats at the time, and in such a large incident, there was negligence on their part. However, it appears that the utility stores management ignored the matter as a routine operation, regardless of the fact that employees of the USC forged ration bags at subsidised rates and sold the contents on the open market.

According to FIA officials, a case has been registered against regional manager Sukkur and other employees who sold the items at subsidised prices. The case also includes the names of Area Manager Aftab Bhutto and daily wage employee Maqbool Bhatti. At present, Maqbool is in jail while Naseer Durrani and Aftab Bhutto are out on bail.

The recent incident demonstrates the Sindh government’s gross incompetence, as the Utility Stores Corporation is a government enterprise that is required to provide subsidies. It’s strange that the Sindh government received no concessions, given that the province is ruled by the Pakistan People’s Party (PPP), which is also a part of the federal coalition government. At the very least, the matter should be investigated.