Rs40b fine on mills termed 'wrong'
Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan on Tuesday said that a fine of Rs40 billion on sugar mills imposed by the Competition Commission of Pakistan (CCP) was "politically motivated" and was totally wrong.
He ruled out that sugar millers were involved in recent prices hike; rather he argued that the price surge was due to a 20% decline in sugarcane output instead of market collusion.
Talking to journalists after attending the Auto Parts Summit 2025, organised by the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam), the PM aide accused the former CCP chairperson of casting a double vote in the decision to impose the fine of Rs40 billion on sugar millers.
"I challenge the CCP's decision about sugar mills, which is 100% wrong," Haroon Akhtar said and advocated the "deregulation of ex-mill sugar prices" while the government should only keep reserve stocks.
"The sugar price solution lies in deregulation," he said and dismissed the talk that the decision for sugar export was behind the price hike. He elaborated that the country had a two-year surplus of 1.5 million tons of sugar when the government allowed the commodity's export.
The government kept 0.5 million tons as strategic stock and allowed export of 0.7 million tons. When the new crushing season started, the country had still surplus of around 0.5 million tons.
Haroon Akhtar said that the subsequent 20% drop in sugarcane output pushed down sugar production by about 1.4 million tons, triggering market tightness. "Mills are dispatching sugar at around Rs167 per kg," he said, adding that they had made borrowing at nearly 22%.
While pushing for sugar price deregulation and keeping just strategic reserves, he noted that prices of other crops such as rice were not controlled. "Industries grow when the government exits price control," he remarked.
The special assistant added that the commission's stock analysis was "entirely flawed" and the tribunal had sent the order back. He questioned the voting process, alleging that there was a split decision where the then chairperson cast an additional vote.
He stressed that sugar was exported under a transparent process, which brought about $450 million in foreign exchange.
The PM aide also raised question about appointments in Utility Stores Corporation (USC) and stressed that the government would release overdue salaries of USC employees soon.
He announced the launch of a Voluntary Separation Scheme for permanent, temporary and daily-wage staff, with compensation for contract workers as well.
Regarding Pakistan Steel Mills, Haroon Akhtar said that the government wants to revive the entity through public-private partnership. A feasibility study is likely to be completed and the decision will be taken based on the study.
Speaking earlier as chief guest at the Auto Parts Summit, the special assistant to the PM said that the government was committed to enforcing the New Energy Vehicle (NEV) Policy 2025-30.
He said that the government was going to introduce a vehicle certification law that would mandate safety testing for both locally produced and imported used vehicles. The imported cars failing to comply will be sent back and the domestic ones will have to meet specified standards before launch.
Pakistan has signed the 1958 UN convention, which requires compliance with 169 standards. He said the country had so far met 17 standards and would expand coverage beyond four-wheelers to two- and three-wheelers as well.
"The government's goal is not to shut car manufacturers or make vehicles expensive. Our task is to bring advanced policies," he said, adding that they were working to introduce an updated auto policy next year alongside the existing EV framework.
Akhtar said seven major carmakers were producing vehicles locally and more than 1,200 auto parts manufacturers were also operating in the country. "The auto and parts ecosystem contributes about 3% to GDP and supports over 2.5 million jobs," he said and acknowledged the expensive energy, limited access to technology and financing.
The government has reduced interest rates and energy prices and is steering towards export-led growth, Akhtar said and urged manufacturers to invest in R&D and modern technology to meet global quality benchmarks.
Regarding recent engagements with Chinese firms and the visit to Tokyo, the PM aide said that Japanese officials had raised concerns about tariff protection. He pointed out that prior tariff measures were aimed at curbing imports and raising revenue, which incidentally provided protection.
He added that the forthcoming industrial policy would set the direction on taxation, interest rates and energy tariffs. It will also pitch Pakistan not merely as a market but as an export base. "Build vehicles of that quality here and export from Pakistan," he said.
While addressing the summit, auto parts makers criticised the government for protecting the import of used cars. They also denounced the lack of political stability and inconsistency in policies that halted growth in the auto sector.
Paapam Chairman Usman Malik said that developed countries were protecting their auto industries and even the United States was saving its industry through tariffs.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
4 minutes ago
- Business Recorder
Govt moving ahead with VSS for USCP employees
ISLAMABAD: Despite previous assurances from the treasury bench that there were no plans to shut down Utility Stores, the government is moving ahead with a voluntary separation scheme (VSS) for 11,000 employees of the Utility Stores Corporation of Pakistan (USCP). This decision was revealed by Secretary of Industries and Production, Saif Anjum, during a Public Accounts Committee (PAC) meeting chaired by Junaid Akbar on Wednesday. The final approval for the VSS will come from the Ministry of Industries in coordination with the Finance Division on Friday. Anjum noted that this VSS offer is same previously used for employees of the Pakistan Tourism Development Corporation (PTDC). Anjum cited a history of corruption, lack of transparency, and accumulating losses as the main reasons for the decision to cease USC's operations. Various venders had Rs14 billion liabilities against the corporation. The USC was intended to be a self-sustaining organisation, however, due to its losses, employees had not been receiving their salaries, he added. While the corporation will stop operating nationwide, it will not be dissolved, and its assets will not be sold, he added. The government also plans to transfer the food subsidy, previously managed by the USC, to beneficiaries of the Benazir Income Support Programme (BISP). The ministry has also recommended paying all pending salaries and providing three basic salaries to contractual and daily-wage employees. The decision has faced strong opposition from PAC members. Khawaja Sheraz Mehmood criticised the closure as an 'institutional killing' influenced by the International Monetary Fund (IMF), calling corruption and lack of transparency a mere excuse. He drew a parallel to the Pakistan Steel Mills (PSM), questioning why the government can pay salaries to a defunct corporation but not to USC employees who are already struggling. Naveed Qamar noted that a VSS is being discussed even though many employees have already been laid off and are now jobless. Saleem Mandviwalla suggested that instead of shutting down, the USC could be revitalised under a public-private partnership model, similar to projects in Sindh. Amir Dogar recommended that the government allocate Rs 36 billion to compensate employees, arguing they spent their lives building the corporation's assets, now valued at Rs 200 billion. The committee chairman criticised the government for paying salaries to officials, noting that the managing director of USC was receiving a salary and had five cars at his home. In response, the secretary stated that the managing director was not, in fact, getting a salary. Sanaullah Khan Masti Khel suggested it should be merge with another government entity as it contributed in corona, flood and other disasters. Earlier, the committee examined the audit reports of pertaining to Federal Education and Professional Training. Copyright Business Recorder, 2025
Express Tribune
a day ago
- Express Tribune
Tribunal upholds decision in LDI case
The Competition Appellate Tribunal has upheld the Competition Commission of Pakistan's (CCP) decision to penalise Pakistan Telecommunication Company Limited (PTCL) and other Long Distance International (LDI) operators for entering into an anti-competitive International Clearing House (ICH) agreement. These companies have been directed to deposit the fine within 30 days. The total turnover of PTCL and other LDI operators amounts to Rs11 billion and they have been directed to deposit 2% of the turnover within a month. While upholding the CCP's findings, the tribunal reduced the penalty from 7.5% to 2% of the turnover generated from ICH-related activity. It said that if the operators failed to deposit the penalty within 30 days, it would automatically reinstate the original 7.5% fine. The ICH agreement, signed in 2012, routed all incoming international calls through a single gateway operated by PTCL as the head of LDI consortium. All other LDI operators assigned their termination rights to the consortium, and traffic and revenues were shared on a quota basis rather than through competition. The arrangement fixed termination rates at around 8.8 US cents per minute, up from about 2 cents earlier, effectively eliminating competition and reducing consumer choice. Data from the Pakistan Telecommunication Authority (PTA) showed that the incoming call volume dropped 70%, from 1.9 billion minutes in September 2012 to 579 million minutes in February 2013. Despite the sharp decline in traffic, the LDI operators' revenue surged 308%. In April 2013, the CCP declared the ICH a cartel arrangement involving price fixing and market sharing. It imposed penalties of 7.5% of the annual turnover (approximately Rs11 billion) on each LDI operator and directed the PTA to restore competition to pre-ICH levels. The ICH policy was subsequently withdrawn in June 2014. During proceedings, the LDI operators claimed they entered into the ICH agreement on directives from the Ministry of Information Technology (MOIT) and the PTA, arguing that non-compliance would have risked the loss of their licences. However, the tribunal found no genuine state compulsion and ruled that records showed that the LDI operators had lobbied themselves for the ICH policy. The MOIT had no authority under the Telecom Act, 1996 to issue directives to the operators and its powers were limited to issuing policy directives to the PTA. The tribunal noted that even if the directives had been given, the operators were fully aware that the ICH violated competition laws, as evidenced by their earlier application for exemption under Section 5 of the Competition Act. The agreement, it held, restricted competition, prevented new entrants and clearly fell within the CCP jurisdiction. The ruling reaffirmed that the Competition Act, 2010 applies to all undertakings, including the regulators and government bodies. The tribunal stated that even the PTA could be held liable, if found guilty of restricting or reducing competition. PTCL had argued that the CCP should have conducted an inquiry before issuing a show-cause notice. The tribunal rejected this, saying that an inquiry is not necessary in every case, particularly where facts are admitted. The LDI operators had already acknowledged the existence of the ICH agreement, which was the root cause of the violation.
Express Tribune
a day ago
- Express Tribune
Rs40b fine on mills termed 'wrong'
While pushing for sugar price deregulation and keeping just strategic reserves, the PM aide noted that prices of other crops such as rice were not controlled. Photo: File Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan on Tuesday said that a fine of Rs40 billion on sugar mills imposed by the Competition Commission of Pakistan (CCP) was "politically motivated" and was totally wrong. He ruled out that sugar millers were involved in recent prices hike; rather he argued that the price surge was due to a 20% decline in sugarcane output instead of market collusion. Talking to journalists after attending the Auto Parts Summit 2025, organised by the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam), the PM aide accused the former CCP chairperson of casting a double vote in the decision to impose the fine of Rs40 billion on sugar millers. "I challenge the CCP's decision about sugar mills, which is 100% wrong," Haroon Akhtar said and advocated the "deregulation of ex-mill sugar prices" while the government should only keep reserve stocks. "The sugar price solution lies in deregulation," he said and dismissed the talk that the decision for sugar export was behind the price hike. He elaborated that the country had a two-year surplus of 1.5 million tons of sugar when the government allowed the commodity's export. The government kept 0.5 million tons as strategic stock and allowed export of 0.7 million tons. When the new crushing season started, the country had still surplus of around 0.5 million tons. Haroon Akhtar said that the subsequent 20% drop in sugarcane output pushed down sugar production by about 1.4 million tons, triggering market tightness. "Mills are dispatching sugar at around Rs167 per kg," he said, adding that they had made borrowing at nearly 22%. While pushing for sugar price deregulation and keeping just strategic reserves, he noted that prices of other crops such as rice were not controlled. "Industries grow when the government exits price control," he remarked. The special assistant added that the commission's stock analysis was "entirely flawed" and the tribunal had sent the order back. He questioned the voting process, alleging that there was a split decision where the then chairperson cast an additional vote. He stressed that sugar was exported under a transparent process, which brought about $450 million in foreign exchange. The PM aide also raised question about appointments in Utility Stores Corporation (USC) and stressed that the government would release overdue salaries of USC employees soon. He announced the launch of a Voluntary Separation Scheme for permanent, temporary and daily-wage staff, with compensation for contract workers as well. Regarding Pakistan Steel Mills, Haroon Akhtar said that the government wants to revive the entity through public-private partnership. A feasibility study is likely to be completed and the decision will be taken based on the study. Speaking earlier as chief guest at the Auto Parts Summit, the special assistant to the PM said that the government was committed to enforcing the New Energy Vehicle (NEV) Policy 2025-30. He said that the government was going to introduce a vehicle certification law that would mandate safety testing for both locally produced and imported used vehicles. The imported cars failing to comply will be sent back and the domestic ones will have to meet specified standards before launch. Pakistan has signed the 1958 UN convention, which requires compliance with 169 standards. He said the country had so far met 17 standards and would expand coverage beyond four-wheelers to two- and three-wheelers as well. "The government's goal is not to shut car manufacturers or make vehicles expensive. Our task is to bring advanced policies," he said, adding that they were working to introduce an updated auto policy next year alongside the existing EV framework. Akhtar said seven major carmakers were producing vehicles locally and more than 1,200 auto parts manufacturers were also operating in the country. "The auto and parts ecosystem contributes about 3% to GDP and supports over 2.5 million jobs," he said and acknowledged the expensive energy, limited access to technology and financing. The government has reduced interest rates and energy prices and is steering towards export-led growth, Akhtar said and urged manufacturers to invest in R&D and modern technology to meet global quality benchmarks. Regarding recent engagements with Chinese firms and the visit to Tokyo, the PM aide said that Japanese officials had raised concerns about tariff protection. He pointed out that prior tariff measures were aimed at curbing imports and raising revenue, which incidentally provided protection. He added that the forthcoming industrial policy would set the direction on taxation, interest rates and energy tariffs. It will also pitch Pakistan not merely as a market but as an export base. "Build vehicles of that quality here and export from Pakistan," he said. While addressing the summit, auto parts makers criticised the government for protecting the import of used cars. They also denounced the lack of political stability and inconsistency in policies that halted growth in the auto sector. Paapam Chairman Usman Malik said that developed countries were protecting their auto industries and even the United States was saving its industry through tariffs.
