Fertilisers were imported at a comparatively higher cost when foreign firms got contract

KATHMANDU, SEPTEMBER 13

Reacting to the cancellation of tenders for supply of urea, one of the two suppliers who had been penalised today claimed that the fertiliser consignment was delayed due to the coronavirus pandemic and frequent changes made to the contractual clauses by the government’s nodal agency.

The concerned company, Shailung Enterprises, which had won one of the two tenders (the second one was won by Honiko Multiple), stated that the government’s accusation that it was negligent in fulfilling its responsibility was wrong.

The company’s statement comes shortly after the government’s nodal agency, Agriculture Inputs Company Ltd, cancelled the two contracts stating that the vendors had failed to bring fertilisers consignments on time. “Previously, the government used to import fertilisers through foreign parties and if they were not able to deliver the commodity within the stipulated period, additional eight months would be provided for delivery,” it stated.

“Moreover, fertilisers were always imported at a comparatively higher cost when the contract was awarded to foreign firms,” it added.

The company also claimed that all the previous importers of urea were foreign companies and import agreements that were drafted were in favour of foreign parties. “Trying to impose the same type of agreements on domestic players is not feasible given the current situation and the working process and procedure involved in the Nepali scenario,” it said.

According to Shailung, one of the major reasons behind the delay in fertiliser import is that the initial agreement mentioned that the government would pay 90 per cent of the total payment mentioned in the letter of credit (LC) when fertilisers arrived at Kolkata port and the remaining 10 per cent when the goods were delivered to the concerned godowns. “However, the agreement was later changed and the government said it would pay the total amount only when the fertilisers were delivered to the government appointed parties. Along with the contract, LC documents were also amended time and again, resulting in several technical complications,” the company said.

“With the change in payment terms our foreign supplier refused to work as per the changes and did not deliver urea as promised earlier and it took us time to renegotiate the deal,” an official at Shailung said.

The official added that the change in LC and payment agreements and the closure of government offices and banks and financial institutions due to the lockdown caused further delays in mobilising resources.

As per the company, the LC was initially drafted in the name of a Russian supplier, but due to the pandemic Russian ports were shut down completely, affecting all export and import activities, hence a new supplier had to be sought.

The second LC was drafted in the name of a supplier from Oman and only works related to packing and loading the sacks remained but the COV- ID-19 delayed our schedule, the official explained.

“In addition to the pandemic, Amphan cyclone hit West Bengal on May 20 which damaged the Kolkata port and the port authorities informed that reconstruction of the port would be completed not before October and clearance to dock ships at the port would be given from September 30,” the official added.

Shailung added that it received an email from Haldia Port about resumption of cargo facility only after September, but in the meantime the process of loading the cargo at Oman port had been cancelled and it had to pay the shipment company for the cancellation of the shipment.

“We had informed the authorities concerned about the emerging developments,” the official said.

The company also claimed that the government sent a letter to the company stating that their contract had been cancelled a day after such news was published in the media.

A version of this article appears in e-paper on September 14, 2020, of The Himalayan Times.