‘Land allotment for industrial use’ PSM board challenges caretaker govt’s claim

ISLAMABAD: Pakistan Steel Mills (PSM) Board has challenged the claim of the caretaker Minister for Privatisation, Fawad Hasan Fawad, with respect to allotment of land for industrial use during the last 5-10 years.

The caretaker Minister in his interviews had stated that the PSM Board during the last 5–10 years has allotted about 3600 acres industrial land to various private businesses. He had also given the same statement in the Apex Committee of the Special Investment Facilitation Council (SIFC) in its 6th meeting held on October 4, 2023, due to which, the Apex Committee of SIFC has stopped further alienation of PSM land and constituted a Committee under the convenorship of federal minister for Industries & Production, with federal minister for Privatization and Chief Minister of Sindh as members to recommend optimum utilisation of PSM industrial land for industrial purpose either setting up Special Economic Zones (SEZs) or Export Processing Zones (EPZs).

Well informed sources told Business Recorder that the matter was deliberated in the recent meeting of PSM Board of Directors. The Board noted that the statement given by the caretaker Minister is inaccurate, and decided to share the facts with the Government.

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According to sources, the record shows that 2,069 acres industrial land has been allotted/ leased for different Public Sector/ National Projects in compliance with the directions/ decisions of the then federal governments. All were approved over ten years ago; hence not during the tenure of the current Board.

“All parcels of the land were leased out for industrial purposes under the established SOPs of Pakistan Steel and with approval of Board and MOI&P or the Cabinet,” the sources said, adding that the Board of Pakistan Steel at all times includes three ex-officio/ government members (one each from three ministries – Finance, MOI&P and Privatisation) apart from the private sector members. The three large land parcels were allocated to downstream industries, Bin Qasim Industrial Park and Tuwarqui Steel Mills; all national projects/ initiatives undertaken in compliance with directives of the government of Pakistan. The land/ plots in National Industrial Park have been/ are being allotted by PIDC to private parties for setting up industrial units on mutually agreed terms and modus operandi.

Detail of 2069 acres allotted/ leased land is as follows: (i) in compliance with the GoP direction, PSM leased its 12 acres industrial land to a public sector entity, M/s NPCL, with the approval of Board. NPCL was working under the control of the then State Petroleum Refining and Petrochemical Corporation; (ii) in line with decision taken by the GoP in a meeting held on December 19, 1982 under the chair of Minister for Production and notification of October 22, 1984 issued by Industries & Mineral Department Government of Sindh, PSM developed downstream industrial estate on its 731 acres of land. This was in line with the charter of Pakistan Steel to promote and set up related industrial units on its industrial land to increase industrialization and create jobs; (iii) Memorandum of Understanding (MoU) was signed on May 28, 2004 between ‘The President of Pakistan’ through MOI&P and ‘Al-Tuwarqui Group of Companies’. MOI&P forwarded the request of TSML on June 15, 2004 and directed PSM to take necessary action for transfer of land to TSML. Accordingly, after getting approval from its Board, PSM leased out its 220 acres land to TSML for 60 years for setting up a steel plant; (iv) MOI&P noted on February 23, 2007 that ECC of the Cabinet has approved a summary of MOI&P regarding allotment of 930 acres land of PSM to NIP for development of Bin Qasim Industrial Park. Accordingly, PSM handed over its 930 acres land to NIP and signed an agreement with NIP (now PIDC) on July 13, 2007; (v) keeping in view, a public sector important project, pursuant to Board approval, PSM leased out its 11 acres land to SSGC for establishment of Custody Transfer Meter Station for LNG terminal; (vii) in line with directives of Prime Minister, approval of CCoP, No Objection of MOI&P and approval of ECNEC, consequently, with the approval of its Board, PSM leased its 158.347 acres to Port Qasim Authority (PQA) for establishment of Coal Stockyard & Loading Station; and (viii) in compliance with directions of Prime Minister and MOI&P, PSM in January 2021 allotted 6.5 acres land to SSGC for laying of RLNG pipeline.

The sources further stated that MoI&P/ GoP has proposed further 1,500 acres of PSM industrial land for establishment of Karachi Industrial Park (KIP) as Special Economic Zone by PIDC. In line with guideline of MOI& P, terms and conditions are being finalised between PSM and PIDC.

The Board also directed PSM Management to request the Ministry of Industries & Production to place the land related issues such as encroachments etc. which are unresolved since long, before the Committee constituted by SIFC to resolve these issues with the help of Chief Minister Sindh.

The sources further stated that Pakistan Steel had a number of residential schemes in place for the benefit of its employees and retirees which were on hold due to the entity being on the privatisation list. These need to be progressed so that commitments can be discharged.

The Board and management are also developing plans to handle their financial liabilities from its own resources to reduce the burden on the national exchequer. The Government of Pakistan had given large sums to PSM as loans to pay off the liabilities of employees retired since 2008.

Keeping in view, the ban on further alienation of land imposed by SIFC, the Board directed PSM management to share the summary of the business plan with SIFC and obtain their guidance through the Ministry of Industries & Production. Accordingly, PSM requested Ministry of Industries & Production to share the matter with SIFC for review and to obtain guidance/ consent of SIFC enabling PSM to discharge liabilities of its retired employees (retired since November 1, 2021).

PSM also received proposals for setting up export-oriented industries on its industrial land. These proposals were evaluated and found to be beneficial to promote industrialization in the country and help to increase export revenue.

As the county needs massive foreign investment and a way to save national exchequer on imports, PSM Board in its recent meeting directed PSM management to request Ministry of Industries & Production to obtain permission from SIFC enabling PSM to proceed further in the matter.

Copyright Business Recorder, 2024