Pakistan and China have reportedly discussed the possibility to include Pakistan Steel Mills (PSM) in China Pakistan Economic Corridor (CPEC), well informed sources told Business Recorder. This proposal came under discussed at 9th Joint Cooperation Committee (JCC) meeting held on November 6, 2019 in Islamabad.
However, other options are also open for getting the "best deal" to revive the PSM, which is inflicting about Rs 2 billion monthly losses to the national exchequer.
The sources said the revival of PSM was also discussed between Pakistan's top political leadership and the Chinese top brass during recent visits. However, no final agreement was reached between the two countries.
"If both countries agree to include PSM in CPEC, it will be out of PPRA radar," the sources added.
The debts and losses of the PSM increased from Rs 460 billion to Rs 510 billion during PTI government as Rs 120 million per day financial bleeding continues.
The PSM Board recently selected Additional Secretary, Ministry of Industries and Production, Alam Mahsud to run its affairs temporarily.
Chairman PSM Board, Aamir Mumtaz in a letter stated that the GoP, PSM Board and management are determined to revive the entity. The objective of the revival is to restore the production capacity of the mills to its original maximum level of 1.1 million tons and operationalize all the associated downstream mills. In the second phase, the mills will be expanded to 3.3 million tons.
The government and the board intend to achieve the revival through a variety of possible models. These include Public Private Partnerships (PPP) managed through Privatisation Commission, direct investments, joint ventures or other forms of collaboration. Discussions with international interested parties on a variety of possibilities are taking place. The PSM's board and management are also engaged in discussions with local groups.
The government recently advertised the position of Chief Executive Officer (CEO), PSM as this slot is vacant from January 2013. The entity is victim of ad-hocism and management structure is non existent.
According to sources, Chairman Board agreed and stated that the current status of PSM is not business as usual. The revival of PSM will necessitate making revival related decisions on war footing. However, those decisions will not duplicate the routine administrative and financial powers of the Chief Executive Officer. The position of the CEO is being filled.
Chairman-BoD mentioned that he has written to the Finance Ministry that interest on loans given to PSM by the Government have never been declared while approving the said loans, pending a request to proclaim PSM as a sick unit from the year 2015 as the Companies Act 2017 provision 292 is under consideration.
The Stakeholders Group headed by Mumrez Khan has written a number of letters to the Prime Minister, Ministry of Industries and Production and Ministry of Privatisation, requesting to consult the Group on revival plan as it can give best proposals to operationalize the mills on full capacity. However, the bureaucracy in the federal capital is not extending cooperation to the Group.
He recently informed Senate Standing Committee on Industries and Production that
Convener PSM stakeholders, Mumraz Khan, told the committee that private steel mills mafia is against revival of PSM. He said with the closure of PSM $ 11 billion financial loss has been inflicted on the economy. He further stated that PSM's stakeholders group has a revival plan but nobody is ready to receive or discuss it. He proposed that if tariff on imported raw material is rationalized, additional revenue of Rs 100 billion can come into the national kitty along with revival of PSM.
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