–Hammad Azhar rejects privatisation rumors, says bidding for PSM joint venture will be held later this year
ISLAMABAD: Federal Minister for Industries and Production Hammad Azhar on Wednesday rejected rumors regarding privatisation of Pakistan Steel Mills (PSM) and said that the steel mill will be run in collaboration with private partners.
While briefing the Senate’s Standing Committee on Industries and Production, Azhar clarified that PSM has not been privatised and that bidding for a joint venture will be held later this year.
The minister for industries and production further said that out of the 12 international companies which expressed interest in PSM, six companies have already visited the steel mills.
Azhar said that some lands belonging to the steel mills were being leased out, adding that big decisions needed to be taken in order to make PSM self-reliant.
He further informed that in 2008 Pakistan Steel Mills had a fund of Rs10 billion, after which sales began to drop due to low steel prices in the world market. He said that while sales of PSM were dropping, 4,500 steel mills employees were made permanent in 2010 which added to its financial burden.
In 2010, average production of PSM dropped to around 40 per cent, which later further dropped to just six per cent. The PSM was shut down by the Pakistan Muslim League Nawaz (PMLN) government in 2015, said Azhar.
Azhar said that while the PSM remained non operational, working and retired employees kept receiving billions of rupees in salaries and pensions for a period of five years.
The minister further said that the root cause of PSM’s problems is the high number of employees and the fact that it has not expanded to its potential.
“Out of 19,000 acres owned by PSM, the PSM plant is established on just 1,700 acres of land. There is a lot of room for expansion,” he said adding that PSM’s deficit was more than Rs225 billion.
The minister further informed that Pakistan’s steel consumption stands at seven million tonnes adding that despite several steel mills being operational in the country Pakistan still imports iron and steel products to fulfill its demand.
The committee was informed that in 1973, 19,013 acres of land were purchased for PSM. Out of the 19,013 acres, 10,273 acres were used to set up plant and other allied services while 8,071 acres were allotted for steel mills township. In addition to that an industrial park has been established on 1,049 acres of land.
Senator Sirajul Haq urged that instead of privatising PSM, the state owned entity should be made viable and a Chief Executive Officer (CEO) should be appointed for it at the earliest. He also urged the government to restructure the utility bills of PSM.
Meanwhile, PSM former chairman Senator Abdul Qayyum suggested that some of PSM’s land should be sold to clear its debt.
During the meeting, committee members expressed dismay over the government’s handling of the steel mills and demanded that the issues faced by retired employees of the steel mills should be resolved at the earliest.