PSM liabilities: CCoP seeks more details

MUSHTAQ GHUMMAN

ISLAMABAD: Cabinet Committee on Privatisation (CCoP) has reportedly sought further details of Pakistan Steel Mills (PSM) liabilities prior to proceeding further with sell off/ leasing plan, well-informed sources told Business Recorder.

The case of the PSM was presented before the Cabinet Committee on Privatisation (CCoP) in its previous meeting but it could not sail through due to insufficient information on the liabilities, the sources added.

Privatisation Commission has already held talks with an Iranian group and a Chinese group along with a Pakistani concern, which insiders claim is M/s Siddique Sons.

PSMs land is occupied by Golf Club, different industrial units and Gulshan-i-Hadeed, the sources said, adding that the Cabinet Committee on Privatisation (CCoP) has requested details of each asset including rent and income, etc.

Sources said that it s a tedious exercise which is again being done by the concerned stakeholders which is time consuming.

There is also a possibility that the newly-appointed Sindh governor Muhammad Zubair will take up this issue with the Sindh government and offer the mill on the same condition which was offered to the private sector, said one of the officials of the Finance Ministry.

The sources said, Finance Minister Ishaq Dar held an inter-ministerial meeting on the PSM which was also attended by Chairman of the Board of Investment Dr. Miftah Ismail who is also Chairman of the SSGC Board of Directors and Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi, and Secretary, Industries and Production.

The acting CEO of the PSM was allowed to attend the meeting in the Finance Ministry whereas other officers were directed to sit out of the committee room.

When contacted, one of the participants informed this correspondent that the meeting discussed different options to revive the closed unit. However, Muhammad Zubair, the then Chairman Privatisation Commission dispelled that impression saying that: We simply discussed the treatment of settling the main liabilities. That has to be part of the solution. Government cant leave that unresolved. Zubair added.

PSM has suffered provisional losses of Rs4.09 billion during the first quarter of 2016-17. The accumulated losses up to September 30, 2016 amounted to Rs167.315 billion whereas total liabilities were Rs177.778 billion till September 30, 2016. An amount of Rs9.633 billion has been released from November 2014 to mid of August 2016 for the payment of salaries to the PSM employees after the approval of ECC.

According to the Ministry of Industries and Production, the plant has been closed since June 2015 due to insufficient gas pressure which was reduced by SSGC on non-payment of their outstanding dues. PSM has very limited saleable inventory available which could not meet day to day expenditure such as utilities, medical, taxation and interest including food, transport, stationary and repair etc.

However, PC argued that PSM failed to achieve the desired capacity even after exhausting the entire amount of the bailout package of Rs18.5 billion given in April 2014 with a view that at the time of privatisation, PSM will be in an operational condition.

PC further claimed that the closure of the PSM was not because of the government but PSMs inability to convert the bailout into becoming an operational unit and also its constant default in payments to the SSGC which now amount to Rs42 billion.