Cbi Begins Probe Into Urea Purchase By Mmtc In 4-95

The Central Bureau of Investigation has initiated a probe into urea purchases by MMTC Ltd during 1994-95. During the year, MMTC had paid nearly $40 million more for its purchases than PPCL, another canalising agency for urea.

Sources in CBI said the documents related to the purchases had already been sought from MMTC's vigilance department.

The inquiry undertaken is only of preliminary nature, said sources, adding that a formal case would be registered if irregularities were discovered.

The CBI is also looking into how the performance guarantee bonds regarding a particular supplier for the same year was allowed to lapse even though the claims had not been settled, thus not fulfilling the obligations under the contract.Besides, the higher f.o.b. price paid by MMTC will be looked into.

 

During the year MMTC purchased 1 million tonnes of urea at $245 per tonne. There had been an uproar in Parliament in mid-1995, after details of the deal had become public. Several officials connected with the purchase were transferred, while the director handling the fertiliser division was divested of his charge. .A large quantity of purchases were made from floating cargo that were discovered soon after tenders had been floated. These supplies were contracted on a C&F (cost and freight) basis, even though the government guidelines provide for purchases from floating cargo on an f.o.b. basis only.

Another aspect of the urea purchase being looked into, according to the CBI sources, involves the repeated extensions granted to some of the suppliers to execute the contract without levying a penalty. One of the suppliers did not execute a contract at all. However, subsequently, further contracts were placed on the supplier.

Ferico, Transammonia, G Premjee, Conagra and Cargill were among the companies that had effected supplies for 1994-95.