PSM agrees to exchange 5,774 acres land for settling its debts

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Islamabad: Pakistan Steel Mills woes worsened further as it was reported that its two largest creditors, National Bank of Pakistan and Sui Southern Gas Company have provisionally agreed to acquire its land against the debts owed by the state-owned entity.

Privatization Minister on Wednesday said both NBP and SSGC in principle have agreed to this financial settlement plan, while also informing the Senate Standing Committee on Statistics and Privatization reported Express Tribune.

Subject to approval from Cabinet Committee on Privatization (CCOP), the modalities of the agreement are then expected to be finalized.

As per provisional agreement, NBP and SSGC have been given the option of acquiring 5,774 acres of PSM’s clean title land, whose market value is said to almost equal the latter’s outstanding debt, a CCOP official said.

He added there were still problems over valuations and NBP, SSGC and PSM’s board of directors are yet to give their seal of approval to this settlement plan.

Senate Standing Committee on Finance Chairman Senator Saleem Mandviwala from Pakistan People’s Party voiced his opposition to this settlement plan, as he said that this deal couldn’t go ahead without prior resolution of the land issue with Sindh government.

Sindh is off the opinion that the land had been given for industrial purposes only and hence couldn’t be sold or used for other purposes.

Balking on the public-sector enterprises which have been costing Rs400b to the national exchequer, Aziz opined the national narrative on the problem of privatization needed to be changed. He added that these PSEs no longer remained public assets as the cash they are bleeding could have been utilized for benefit of the populace.

Aziz also lambasted banks for lending profusely to loss-making PSEs even though PSM’s financial position hadn’t improved much even after a Rs76b bailout package given by the government. Total losses of PSM had soared to Rs176.6b by end of June 2017.

Chairman Standing Committee on Statistics and Privatization, PTI’s Senator Mohsin Aziz raised question marks about the ruling government’s privatization strategy. He stated that government had failed to privatize loss-making PSEs and indulged in transactions on the capital market in profitable commercial banks which were already privatized.

Aziz said there were conflicts in the government privatization policy, as it had put power generation companies on privatization list but on the contrary, was busy setting up power plants in public sector.

 

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