STC ignored FCI in wheat deal

NEW DELHI, April 2: The State Trading Corporation (STC) had tried to "formalise" the Rs 844-crore wheat import deal with Australia...

NEW DELHI, April 2: The State Trading Corporation (STC) had tried to "formalise" the Rs 844-crore wheat import deal with Australia on March 19, just hours before the Bharatiya Janata Party Government was sworn. The contract — which was opposed by the Food Corporation of India (FCI) — was finalised in just eight days.

On March 19, the STC called a meeting of its board members to "ratify" its earlier decision to import 1.5 million Metric Tonne (MT) wheat from Australia. The agenda was distributed among the board members. But, STC sources said that one board member refused to sign the ratification letter.

The letter was then reportedly re-drafted and the STC board is understood to have passed an order, saying that the 1.5 million MT wheat deal has been "noted" by the board.

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When contacted, STC spokesperson R P Ghosh refused to divulge details of the board meeting. "It is not true to say that the board had not ratified the wheat deal," he said.

When asked whether he can categorically say that the dealwas ratified, he said he would not go into the details. But if there is any inquiry, the STC would furnish all the details to the investigating agency, he said, adding that the wheat import deal was undertaken as per the directions of the Government.

The STC board’s agenda reveals that the FCI had opposed the wheat deal on the grounds of non-availability of gunnysacks, storage capacities and port handling, particularly at southern ports.

The FCI had suggested that even if the STC wanted to go ahead with the deal, it should "stagger shipments to a longer period."

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According to the STC’s agenda, signed by its director Rita Kumar, the Gujral government, in a letter dated February 19, had authorised STC to float wheat tenders "in a low-key manner with minimum publicity so as not to disturb international prices". In a further communication on February 27, the Gujral government directed STC to "increase the quantity of import by another one million MT, taking the total to two million MT during1998."

Accordingly, STC floated a "limited" tender on February 21, which was a Government holiday. The tender was closed on February 25 and the deal for 1.5 million MT of Australian standard white wheat was clinched by the Australia Wheat Board (AWB) on February 27. The Rs 844-crore deal, according to the STC’s agenda, was made in a record of eight days time, when the nation was going through the election process.