The Sindh Government is reportedly not interested in acquiring the non-operational Pakistan Steel Mills (PSM) until federal government offers financial incentives, well informed sources told Business Recorder. The federal government, in its last letter to the provincial government said in no uncertain terms that if the Sindh government does not take a decision in this regard by June 10, 2016, then the federal government will take a decision on the future of the entity.
"CCoP had directed the Privatisation Division to write a final letter to the Government of Sindh inviting an offer of their final position, and finalise the process by 10th June, 2016," the sources added. The sources said the federal government gave enough time to the provincial government to send a well considered reply to its offer. However, the Sindh government has reportedly made up its mind that it would not acquire PSM without incentives.
Sometimes a lack of response is a response in itself, said an official on condition of anonymity. Sources close to Chairman Privatisation Commission told Business Recorder that the Council of Common interests (CCI) had approved [in May, 1997 and August, 2006] the privatisation of the Pakistan Steel Mills. Subsequently, the Cabinet Committee on Privatisation (CCoP) in its meeting held on October 3, 2013 approved the privatisation programme for early implementation, which included the privatisation of Pakistan Steel Mills Corporation.
The sources maintained that CCoP, in its meeting held on October 2, 2015, had decided to approach the Government of Sindh to acquire PSMC with all its assets and liabilities as [the Government of Sindh] had expressed an interest to acquire the PSMC. Accordingly, the Privatisation Commission on October 14, 2015 offered to the Government of Sindh to acquire PSMC and subsequently provided the requisite documents enabling the Government of Sindh to take a decision in the matter. The Government of Sindh was requested to convey their final decision by January 21, 2016. However, their response is still awaited.
The sources further stated that a meeting between the Ministry of Industries & Production and Ministry of Ports & Shipping was held on January 12, 2016 to discuss the matter pertaining to transfer of 200 acres of PSM land situated on eastern side of Port Qasim Railway line to Port Qasim Authority. During the meeting, the issues pertaining to ownership of the land emerged. The Chief Executive Officer of PSMC insisted that the PSM was not only in possession of the entire land [200 acres] but was its legal owner, saying that these 200 acres of land constituted an integral part of the PSM Core land. Additionally, a report of the Assistant Commissioner, Bin Qasim, District Malir, dated January 27, 2016, maintains that out of 200 acres of land, approximately 104 acres of land belongs to Pakistan Steel Mills while the remaining 96 acres of land belongs to the Government of Sindh. However, PSM disagrees with the report and, till date, no joint survey has been conducted.
The Ministry of Industries & Production had conveyed no objection to the transfer of the 200 acres of land from PSM to Port Qasim Authority, subject to approval of the Privatisation Commission. PSM has also expressed its willingness to lease 200 acres of land to Port Qasim Authority subject to payment of lease money and clearance from PC. However, PC argued that it was not in a position to recommend carving out 200 acres of land from the assets of PSM, until a final response is received from Government of Sindh. PC further stated that an NoC for carving out of 200 acres of land could only be given after approval of CCoP.
The sources said, Privatisation Division, in a recent meeting of CCoP submitted the two following proposals for consideration: (i) refer to its earlier decision of October 02, 2015, and decide whether or not it may be feasible for the Federal Government to continue to await a final decision of the Government of Sindh, while the GoP continues making hefty payments to a shut-down PSM or revoke the offer dated October 02, 2015 and continue with the privatisation of PSM; and (ii) consider and decide upon the transfer of 200 acres of land from the assets of PSM to Port Qasim Authority for the purpose of setting up a coal stock yard for the power projects subject to payment of lease money to PSM at current market rate.
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