Let us face the facts. Pakistan Steel Mills (PSM) is the biggest white elephant this country possesses, on par with the Pakistan International Airlines (PIA) - but at least the airline is fully operational. PSM is stuck in a perpetual loop of mounting dues, defaulted debts and unpaid employees - currently at Rs415bn, including Rs166bn payable liabilities - while production rests at a measly 8% capacity. It’s 10 member board is staffed by 4 people, it’s 7 directorates are being juggled by 2 people, and it does not have a permanent Chief Executive Officer (CEO). Chairman Export Processing Zone Authority (EPZA) Mumtaz Ali Shah holds the additional charge of PSM CEO.

In the face of this the decision to lease out the deteriorating plant to a party which can get it operational seemed like an obvious and intuitive choice. After the government - through the Cabinet Committee on Privatisation (CCoP) - gave the go-ahead for plans to start materialising, a transaction committee had drawn up a detailed plan for the lease of the industrial complex for 45 years, which was summarily approved and had begun drawing interest from international buyers.

Now, without warning, and more importantly, without any explanation whatsoever, the CCoP - headed by the Finance Minister Ishaq Dar - has decided to pull the plug on the plan and postpone the decision on the fate of the mill indefinitely. Instead we are met with the tired old platitudes delivered by the Finance Minister who hoped that this delay will be “helpful for the economic growth in the country and improve its financial health”. What does that mean? Why was this decision taken?

The bigger problem is, how will the federal government keep the plant running? In the short term it has to pay a total of 12,800 employees, many of whom are picketing outside the gates of the plant because they haven’t been paid for three months, and deposit large sums into the trust funds to make the defaulted payments to retirees and gratuity eligible.

In the longer run the problems get much worse, including how to get the plant operational to the extent that it becomes economically viable and produces enough steel that the country does not have to rely on “replacement imports” that were started because the plant was failing. Ishaq Dar and CCoP need to have a concrete plan in mind, just directing the members to “make it cost-effective and efficient” is not enough when successive governments have failed to do so over the decades.

The answer provided by the CCoP was to consider the privatisation of several other smaller state owned companies to make up the cost. Not only does this idea seem makeshift and time-consuming, it fails to deal with the problems with PSM itself, and as such it will only be a stop-gap measure.