- ‘Govt has given PSM management a 45-day ultimatum to come up with a comprehensive plan with regard to running the mill at its full capacity’
ISLAMABAD: Finance Minister Asad Umar has said that the government has no plan to privatise the strategically important state-owned enterprises (SOEs) including Pakistan Steels Mills (PSM), Pakistan International Airlines (PIA), and Pakistan Railways. However, the government would privatise institutions with no strategic value.
“Pakistan Steels Mills is one to those projects that possess immense strategic value for the state. Keeping in view the abundance of iron coal reserves in the country, PSM can become a base for industrialisation,” he said during an interview with a private news channel.
He said the government has given the PSM management a 45-day ultimatum to come up with a comprehensive plan with regard to running the mill at its full capacity so that it could become a profitable project.
“The past two governments had conducted feasibility studies on the project; one conducted from Russia and the other from China. Both countries said the project was quite feasible and it could become profitable,” he mentioned. “During the early days of the Pakistan Muslim League-Nawaz government, China conducted the feasibility study on PM and said if the government poured into the project an investment of Rs80 billion, the mill could achieve the capacity of generating 1.3 million tonnes steel per year. The mill, at that time, was running on the capacity of only 0.15 million while today it stands totally collapsed.”
The finance minister noted that the “Washington formula” of no state intervention in the business of the country was not being implemented by any developing country.
“No one can give the example of any developing country who has implemented this formula during the last 50 years across the world. China, Singapore, Saudi Arabia, Malaysia, Qatar, UAE, and India, all have very large commercial state-owned entities,” he added.
With regard to PIA, the finance minister said that the government had recently approved a bailout package of Rs23 billion to carry on the business of the airline but “this is not the solution” and is only a bandage; it needs much more money to keep it on track.