ISLAMABAD-Federal Minister for Industries and Production Hammad Azhar on Wednesday said that 12 Chinese and Russians firms have expressed an interest in Pakistan Steel Mills (PSM), which is facing massive losses.

He said that government would not privatise the PSM, as it would run it through public-private partnership. “Six of the 12 international companies, which have expressed interest in the privatisation of the PSM, have toured the facility and three are serious about purchasing it”. He added that these companies are from China and Russia. The PSM could only be bought by an international company since local investors do not have the capability to do so. “An investment of more than $1 billion is required to run the PSM,” he told the Senate Standing Committee on Industries and Production.

The deficit of PSM has surged to Rs225 billion despite different governments had given incentives packages worth of Rs80 billion in last few years, the federal minister said. He informed that government is continuously paying salaries to the workers of PSM, which is dysfunctional since 2015. Hammad Azhar said that government would have to take difficult decision to improve the conditions of public sector entities. Sharing details, the minister said that PSM was in profit in 2018. However, the PSM had started facing losses and went into deficit due to reduction in steel prices in international market. On that time, about 4,000 PSM employees were made permanent in 2010 and the industrial unit went into a loss.

He underlined that the Supreme Court has already sought a plan regarding the PSM. The minister stated that Pakistan’s total steel consumption is seven million tonnes and the country currently produces seven million tonnes. Pakistan currently imports all raw materials for making steel products, he added. He further explained that the public institutions’ payables equalled Rs1.5-2 trillion, “exceeding our annual defence budget”.

The members of Senate Standing Committee on Industries and Production noted that PSM is imperative organization of the country, which provided jobs to the thousands of Pakistanis and played role in development of the country. However, the PSM started facing losses in 2008 and eventually closed down in 2015.

Senator Siraj-ul-Haq, who had raised the issue of PSM in Senate, has demanded of the government to follow a policy, which could save the jobs hundreds of employees of PSM. He asked the Senate Standing committee to constitute a subcommittee, which could workout alternate plan against the privatization of the PSM. He proposed that government should sale the precious land of the PSM to reduce it losses. He was of the view that public-private partnership could not resolve the issues of the PSM.

He said that PSM had played key role in progress of the country. The PSM had paid taxes worth of Rs150 billion in national exchequers. He proposed that government should try to run the PSM by appointing professionals and eliminating late surcharge on gas bills. The PSM would able to pay the salaries of its workers once it is functional, he added.