ISLAMABAD - The PTI led coalition government has yet to implement the revival plan for Pakistan Steel Mills (PSM) in almost one year as the losses and liabilities of the country’s largest industrial complex are continuously increasing.

Losses and payable debts of the PSM had increased by Rs40 billion in ten months. Losses and payable debts had gone to Rs500 billion on June 2019 from Rs460 billion on August 2018 when the incumbent government had assumed the charge, sources in PSM informed The Nation. They further said that government had prepared revival plan for the PSM. However, the government is holding talks with Chinese and Russian companies for sale of the PSM on the basis of public-private partnership.

The government had also decided to conduct the audit of the PSM. The Ministry of Privatisation has asked Ministry of Industries and Production to conduct audit of PSM accounts till 2018-19 before offering it to a private party on Public Private Partnership (PPP). The Privatisation Commission had also initiated the process of hiring Financial Advisor (FA) to solicit suitable partnership for the revival of PSM. The federal cabinet had recently decided that PSM would be handed over to the successful bidder on lease for a period of 25 to 30 years. It was also pointed out that current liabilities of PSM will be settled before offering it for bidding on lease.

Losses and liabilities of industrial complex continuously increasing

The International Monetary Fund (IMF) had also asked Pakistan for the audit of PSM. The new audits of Pakistan International Airlines and Pakistan Still Mills will be conducted by reputable international auditors and published by end-December 2019. The authorities will sort SOEs into companies for sale, liquidation, or retaining under state ownership by end-September 2020.

“The revival plan need massive investment, which will be financed through private partners,” said an official of the Ministry of Industries and Production. He further said that government wanted to enhance the production of the PSM. Under the revival plan, production capacity of the PSM would be increased to 3 million tonnes per annum. Initially, the production capacity of the mill would increase to 1.1 million tonnes per annum in first two years of the revival plan, which would take out the PSM from losses. Later, the production would enhance to 3 million tonnes per annum in later stage of the revival plan. The PSM, under the plan, would be run under public-private partnership. The mill, which remained closed for almost four years, is requiring a heavy investment to make it functional.

The PSM is dysfunctional since June 2015 due to many reasons. The previous PML-N government had given bailout packages to the country’s large industrial complex, which failed to yield results.