The government will pay Rs 700 million interest, annually, on Pakistan Steel Mills Company (PSMC) Rs 7.5 billion banks loans till 2013, besides paying the employees Rs 15.75 billion under voluntarily separation scheme (VSS).
Minister for Privatisation and IT Awais Khan Leghari on Tuesday defended PSMC's sell-off during his talk with mediamen here, saying that the government was spending billions of rupees every year to keep the mills running, and privatisation was the only way out to put an end to this unhealthy practice.
He sharply contradicted chairman Abdul Qayyum's claim that the mills was making money and that it would payback the buyer's money in two to three years.
Awais said: "There was no profit ever shown in PSMC account, and the chairman is fully aware of the fact that the government had been bailing out the management every year by picking up its financial liabilities."
He was critical of the policy of paying public money to run PSMC in the public sector. He argued that running the mills was not the government job and that he was a strong believer of the private sector driven economy. The Minister said the investors invest in those sectors which ensure them payback of money in six to seven years, and only a fool could invest in any project to get back money in two decades or even more.
He noted that the new buyer and the government as partners of 25 percent shares would like to downsize PSMC's workforce through VSS to turn it into a profit-making entity. He said 25 to 30 percent downsizing in workforce through VSS would be ideal to run PSMC for targeted production.
Awais said that the Privatisation Commission would expedite the privatisation process and focus on sell-off of a number of major public sector entities in the future.
He referred to PSO, SSGC, SNGPL, and PPL and resolved to complete their bidding as early as possible.
He told a questioner that Etisalat Telecom had paid the first instalment of $500 million for PTCL last week.