ISLAMABAD
At present, despite tall claims, the government has failed to revive or privatise Pakistan Steel Mills (PSM) during the past four years. The country’s largest industrial complex is likely to be shifted as a liability to next government with zero output.
Apart from piling up liabilities of the mill, the government has been paying billions of rupees in terms of salaries to the thousands of employees of PSM, for doing nothing. The mill is completely shut down for over two years. It was running at the production capacity of 40 per cent when the present government took over the charge in 2013.
Even after leaving the industrial complex dysfunctional for years, the government was in no mode to make a way out of the situation except releasing salaries of PSM employees after every two or three months through approval from Economic Coordination Committee (ECC).
Thousands of PSM employees were getting the salaries while sitting at homes in the present state of PSM which was due to unchecked corruption, inefficiency, over-employment and the government’s lukewarm attitude towards its revival. Earlier, the Ministry of Industries and Production had warned the government that a humanitarian crisis was brewing in the mills because of non-payment of wages and medical expenses. Salaries have been paid from the federal budget for over two years and were considered outstanding since October 2016.
According to sources at Privatisation Commission (now Ministry of Privatization) there was no development regarding the privatisation or leasing of PSM as the government is much focused on Panamagate case and related issues. Even making it a separate ministry has not made any difference. “The minister of privatisation Danyal Aziz has no interest in moving forward on the halted process of privatization of various institutions. It seems he is happy with what has been given as a reward for his role in defending Sharif Family in Panama case,” said the sources.
Apart from the appalling state of Privatisation Ministry, there was also no Chief Executive Officer (CEO) at the PSM to handle issues of concern. Presently, the position of CEO PSM is vacant after the acting CEO Mohsin Haqqani – a BS 22 officer of Pakistan Administrative Service (PAS), opted for Leave Prior to Retirement (LPR) due to pressure from the federal government on administrative issues. The sources said Ministry of Industries and Production has already intimated to the Establishment Division about vacant position of CEO PSM.
In a previous meeting then Acting CEO, PSM, Mohsin Haqqani had suggested that in view of required cost-cutting measures PSM should extend its weekly holidays to 3 days i.e. Friday, Saturday and Sunday to save approximately Rs 1,700,000/week.
After the failure of selling off the mill, the government was previously interested in leasing the country’s largest industrial complex to a private concern for 45 years under a revenue-sharing arrangement, and laying-off almost 5,000 employees. However, the proposal made a few months ago was also yet to be materialised for lack of interest on the part of the government.
A previous attempt to sell the PSM by then prime minister Shaukat Aziz to a Saudi-led consortium for Rs 21.6 billion ($362 million) was struck down by a landmark Supreme Court ruling in June 2006, which practically led to a halt of the privatisation program for almost eight years.
The PSM’s accumulated losses and liabilities, which stood at Rs 26bn at the end of 2008, have increased to around Rs 415bn, including Rs 166bn payable liabilities.
The PSM’s total liabilities and losses have more than doubled since the PML-N government came to power in May 2013. Over $ 5 billion has been spent on ‘replacement imports’ ever since the PSM was put on ‘hot-mode-zero production’ since June 2015.
Naa Ahl Nawaz legacy.