PTI govt to consider strategic partner for PSM revival

[A-Thinker]

ISLAMABAD: The government has decided to explore the possibility of finding a strategic partner for reviving Pakistan Steel Mills (PSM) as an expert group has estimated the restructuring cost at $1.04 billion that the public exchequer alone cannot sustain.
The Economic Coordination Committee (ECC) of the cabinet took a briefing from the expert group, which had been set up to explore various options to decide the fate of the country’s largest but closed industrial unit. The group has given an option to revive the mill on the public-private partnership model.
Finance Minister Asad Umar, who is also chairman of the ECC, has been of the firm opinion that all state-owned enterprises could be made profitable without privatising them by improving their governance.
Legally, public-private partnership is like privatisation and under the law and rules of business the Ministry of Privatisation has the mandate to undertake this exercise.

Despite taking over three months to prepare a plan, the work on PSM revival by the expert group still remains “in progress” amid increasing liabilities including outstanding dues and employees’ salaries and pensions.
The expert group did not give an option to liquidate PSM, which the previous Pakistan Muslim League-Nawaz (PML-N) government shut down about four years ago due to non-payment of dues of Rs46 billion to Sui Southern Gas Company.
“The committee (ECC) directed the Industries and Production Division and Privatisation Commission to submit formal recommendations, in the form of a summary, to the ECC for final decision,” said a brief statement issued by the Ministry of Finance after the meeting.

The ECC also discussed the option of setting up a Special Purpose Vehicle (SPV) for parking Rs206 billion worth of PSM liabilities before the mill was offered to a strategic partner for investment. The cabinet body did not take a final decision.
The PSM revival committee gave a presentation to the ECC and made various recommendations for turning the mill profitable and competitive, said the finance ministry.
Owing to paucity of time, the ECC did not take a detailed briefing and only reviewed executive summary of the presentation. The PML-N government had explored all options for the mill’s privatisation like finding a strategic partner or liquidating the mill, but did not take a final decision.

The PTI government has already removed PSM from the active list of privatisation.
The expert group put the cost of reviving the mill that could produce at its existing capacity at $1.035 billion including over $300 million of downstream industry cost, according to a senior government official. However, due to fiscal

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[kakamuna420]

The best choice would be MMK of russia. They also make weapon grade metal. Last time shaukat aziz wanted to sell yhe mill on kickbacks. This time Pakistan has to try honestly to sell the mill

 

[sher18]

Good. Private Public partnership is the best way to revive. China and Russia have big Industries running on this model are very successful.

Govt keep 51% share and give 49% to private sector. CEO from Private sector, Chairman from Govt.

 

[sher18]

Noora tried to shutdown SM because they want their own mills to make $$$$...

 

[Fawad Javed]

sack all the lazy employees and start from scratch