Privatisation of the Pakistan Steel Mills (PSM) will be completed by December 31, this year, while the government has appointed a financial adviser to assess the worth of the organisation. This was stated by the PSM Chairman, Lieutenant General Abdul Qayyum Khan (Retd) while talking to newsmen after a meeting with the office-bearers and members of the Lahore Chamber of Commerce & Industry (LCCI) here on Thursday.
The meeting was also addressed by the LCCI President Mian Misbah-ur-Rehman, Senior Vice President Sohail Lashari, Vice-President Sheikh Muhammad Arshad, former chamber presidents Iftikhar Ali Malik and Mian Anjum Nisar.
Qayyum Khan hoped that plant and related infrastructure would be offered to the private sector, while prime land and other assets, would be sold by the government separately. He said that the decision of the government to privatise this organisation was very well thought out decision. In the past, mismanagement and other problems had ruined such public sector organisation and the government decision to privatise PSM, was very well considered, he added. He also said that this decision of the government would be in the larger interest of public, private and government itself.
He said that the PSM would hopefully earn a post-tax profit of Rs 6 billion by June 30 this year, while it would pay Rs 8.5 billion under the head of sales tax and income tax. He said that contribution towards government sector under the head of income tax and sales taxes and profits show that this organisation had earned Rs 25 billion during last two years.
Earlier, addressing the LCCI members, chairman PSM said that all stakeholders would be taken into confidence before finalising PSM's privatisation. He was of the view that the government would safeguard the interests of all stakeholders including consumers and suppliers. He said that he had also told the employees that whosoever would take over this organisation would not import labour from abroad. He said that our labour and our people were very good and skilled and could produce state-of-the-art steel.
He also asked the steel producers in public and private sectors to take into account the increasing consumption of steel in the country. He said that in future, big projects like gas pipeline from Iran to India, Gwadar port phase II and III, dams, Islamabad Airport, Afghan reconstruction process, domestic infrastructure improvement, white oil pipeline and others would manifold increase the consumption of steel in the country. He said that only in Iran-India gas pipeline, out of total 4 billion dollars project, one billion-dollar would be used for steel.
He also informed the house that study to look into financial viability of increasing steel production from present one million tons to three million tons had been completed but expansion was delayed, as the government wanted to give it into private sector, which could make expansion according to its needs. He said that the government would take firm commitment from any strategic buyer to give undertaking for essential investments in the revamping of the plant and its subsequent expansion.
He assured the LCCI members that Pakistan Steel, through a transparent system, would continue serving the public interest. In a bid to promote industrial growth, Pakistan Steel has established a downstream industry park in the vicinity of the plant for the entrepreneurs who intend to set up their factories based on product/by-product of Pakistan Steel, he added. He said Pakistan Steel has been able to attract a large number of applications and presently as many as 40 applications are under process for allocation of 500 acres of land.
He further said that the price pattern of Pakistan Steel Mills was founded on international price trends because of its dependence on imported raw material like cooking coal and iron ore. Since 75 percent of the domestic needs are met through imports and ship breaking industry, domestic price structure is fully dedicated by the international factors, he added. He said that Pakistan Steel has huge fabrication potential, which can be used by engineering industries in Pakistan. About iron ore, he said that the development of iron ore mines is the sole responsibility of provincial governments under the guidance of federal government. Pakistan Steel is anxiously waiting to utilise indigenous iron ore to save huge freight charges and import costs. He said iron ores with lesser iron contents are counterproductive and result in losses than gains.
The PSM chairman informed the participants that Pakistan Steel was under debt of Rs 19 billion in 1999 besides having accumulated losses of over Rs 9 billion but now the situation is very encouraging, as the mill is in profit mode and paying huge amount of income tax and sales tax.
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