Secretary Industries and Production Khizer Hayat Gondal said Wednesday that although the government has no plan to review its privatisation plan of Pakistan Steel Mills (PSM) on "as is whereas basis," it is facing issues in finding positional buyers from the market.
Briefing the National Assembly's Standing Committee on Industries and Production, which was presided over by Sajida Begum, he said that China's Boa Steel Group had shown interest in acquiring PSM but the group did not interact with the government after a visit to Pakistan. However, according to unconfirmed information, the Iranian government has also expressed interest in PSM.
The committee was informed that PSM suffered provisional losses of Rs 4.09 billion during the first quarter of 2016-17. The accumulated loss up to September 30, 2016 has been calculated at Rs 167.317 billion. Total liabilities of the Corporation up to September 30, 2016 reached Rs 177.778 billion which include an overdue amount of SSGC, NBP interest and loans, whereas total assets are amounting to Rs 220 billion. However, according to unconfirmed estimates, the worth of assets of PSM, evaluated by M/s Naanjee, is around Rs 260 billion. The plant of PSM has been closed since June 2015 due to insufficient gas pressure which was reduced by SSGC on non-payment of their outstanding dues. The PSM has very limited saleable inventory available which could not meet day-to-day expenditures such as utilities, medical, taxation and interest.
On April 25, 2015, the ECC considered a summary of Privatisation Commission on "restructuring options of PSM" and approved a bailout package of Rs 18.5 billion. After receipt of bailout package, the PSM has been lifted from 1 per cent CAPU (capacity utilisation) of April 2014 to 42 per cent in March 2015 but plant's gas pressure was reduced to the lowest level due to which production had been halted.
An amount of Rs 9.633 billion has been released from November 2014 to mid-August 2016 for the payment of salaries to the employees after the approval of ECC. On account of gratuity, Rs 322 million and Rs 189.6 million have been paid to 98 retired employees and the families of 138 deceased of the PSM.
The committee was informed that the strength of PSM employees has been reduced to 12,800 from 14,000 as a number of employees have retired. He said the government has recently approved one-and-a-half-months salary for the employees and also decided that from now onward salaries would be paid each month. He claimed that each political party has its union in Mills and presently around 300 employees of a specific party have been agitating for the last couple of months. Chaudhry Riaz-ul-Haq claimed that according to his information, out of 12,800 employees, only 2000-2500 employees even reach the mills but all the employees get salaries.
The standing committee expressed annoyance on the absence of Chairman Privatisation Muhammad Zubair and Secretary Privatisation Sardar Ahmad Nawaz Sukhera despite the fact that privatisation of PSM was on the agenda of the meeting.
The secretary industries informed the committee that his ministry had written a letter to the Privatisation Commission requesting them to attend the meeting. The secretary standing committee also apprised the committee that the committee secretariat also wrote letters to the PC for this purpose but the PC said that both the chairman and secretary would be out of Pakistan on the day of the meeting. The committee expressed serious annoyance over the top brass of PC for not taking the committee's meeting seriously.
Sheikh Qaisar Ahmad of PML (N) was annoyed over the apathy of Privatisation Commission on PSM, saying that neither the government nor the opposition did anything for this national asset which is now unable to be reviewed. He specifically criticised his own party for not taking steps to privatise the mills as per its manifesto.
"Our government, Ministry of Industries and standing committee are responsible for current condition of PSM. These committees are useless, institutions have failed to perform. The government has already spent billions of rupees and will do the same in future," he added. The mill swallows Rs 200 million of the poor nation each day, he added.
Sheikh Qasair claimed that he previously urged for early privatisation of PSM but Chairman of the Committee Asad Umar insisted on revival of the unit which is not possible as around Rs 100 billion are required to revive it.
Chaudhry Riaz-ul-Haq, Rana Muhammad Qasim Noon and Iftikhar-ud-Din supported the proposal of Sheikh Qaisar Ahmad for immediate privatisation of PSM. The officials of PSM, including and CFO Arif Sheikh, just witnessed the meeting without speaking a single word, while the acting CEO PSM did not attend the meeting.
Sheikh Qasair wanted that a recommendation should be sent from the committee for expeditious privatisation of PSM and discussion on it in the National Assembly. However, Chairperson Sajida Begum, who hails from PTI and presided over the meeting in place of Asad Umar, did not agree to the proposal saying, let the committee chairman come and discuss this issue.
According to an official statement, the Standing Committee showed its displeasure over the daily losses regarding the Steel Mills and strongly recommended to resolve it on a priority basis after having a meeting with the chairman of Privatisation Commission.
Sajida Begum, who usually contacts with the Ministry's officials for personal issues, criticised Small and Medium Enterprise Development Authority (SMEDA). Prior to start of the meeting she phoned a joint secretary of the ministry and pressed him to immediately process her plan.
The Standing Committee discussed the current status and steps taken by the government for the revival of Pakistan Steel Mills (PSM), Karachi, the Technology Up-Gradation & Skill Development Company (TUSDEC), Lahore, and the National Industrial Development Parks (NIP), Karachi.
The Standing Committee also suggested that institutions like TUSDEC, NIP and PIDC should be reorganised/ restructured. The members who attended the meeting included Qaiser Ahmad Sheikh, Sajida Begum, Iftikhar-ud-Din, Chaudhry Riaz-ul-Haq, Rana Muhammad Qasim Noon, and Sardar Kamal Khan Chang.
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