ISLAMABAD - The Sindh government has shown interest in acquiring Pakistan Steel Mills (PSM) by asking the federal government to initiate talks for making the deal.
“The Sindh government will consider the offer of the federal government to acquire Pakistan Steel Mills,” said Senator Saleem Mandviwalla, member of National Finance Commission from Sindh province. The federal government should take Sindh government on board regarding privatisation of PSM by starting negotiations, he added.
“The Privatisation Commission has not consulted the Sindh government before offering to acquire PSM, as the commission has taken the decision by its own,” the Senator remarked who is also chairman Senate Standing Committee on Finance and Revenue. Mandviwalla asked the Privatisation Commission not take decision on selling loss-making entity in haste. The federal government has not offered to acquire PSM in a written, as we come to know through media reports, he said.
Meanwhile, a senior official of the Privatisation Commission said that Sindh government had informally asked the federal government to handover the PSM to the province. “We have not received any written demand from the Sindh regarding acquiring PSM,” he added.
The Cabinet Committee on Privatisation (CCoP), in its meeting chaired by Finance Minister Ishaq Dar, on Friday decided to offer Sindh government to acquire the Pakistan Steel Mills (PSM) with all its assets and liabilities. The CCoP has taken the decision as the province expressed interest to buy the loss making public sector entity.
Pakistan had committed with International Monetary Fund (IMF) to privatise the Pakistan Steel Mills by the end of June 2016, as entity is continuously bleeding despite injecting billion of rupees in it. The government has failed to enhance the PSM capacity to 77 percent despite giving bailout package worth of Rs22 billion, as Mill is running at less than one percent of the capacity.
The board of thePrivatisation Commission (PC) has recommended the CCoP to transfer operating assets and regular employees-related liabilities to the buyer of the PSM. However, the CCoP decided to offer Sindh government to acquire the Pakistan Steel Mills (PSM) with all its assets and liabilities. The financial advisors of the PSM have estimated the company’s assets at Rs279 billion in which Rs175 billion of federal government and PSM owes Rs104 billion. Similarly, the total liabilities at Rs173 billion include Rs134 billion towards the federal government and Rs39 billion on PSM.
The company has a permanent staff of about 15,500 besides 1,500 temporary workforce. The PSM is unable to pay the wages because of ongoing losses. Last week, the Economic Coordination Committee approved Rs960m for the PSM to enable it to pay two months’ salary to employees.