The government is planning to sell Pakistan Steel Mills (PSM), shut since 2015, early next year after an encouraging response from companies including a Chinese and a Russian one, Minister for Privatization Muhammad Mian Soomro has told Bloomberg in an interview following the conclusion of a series of roadshows with international and national investors for the revival of PSM.
The sale process has been revived after the government carved out the core business into a separate subsidiary which has no loans, employees and substantial liabilities, Soomro said, adding that differences between the federal and provincial government, a major stumbling block in the past, have also been resolved. The land will be given in a lease as part of the transaction.
He said that Prime Minister Imran Khan’s government is looking to sell closed and loss-making units that will help curb losses and raise revenue aimed at reviving a $6 billion loan program with the International Monetary Fund.
The steel mills is among the largest loss making units that costs 17 billion rupees ($100 million) a year.
“The final two years of the government’s five year tenure “are going to be very active” for privatisation, Privatisation is important, thing is to keep losses low and bring in good management,” Soomro said.
The steel complex near the port in Karachi will need investment but it is still viable since there is a shortage of steel that’s imported into Pakistan, said Soomro.
On Friday, the treasury had informed the upper house of parliament that PSM suffered an overall loss and liability of Rs67.1 billion from June 30 to December 31, 2020.
“The PSM has suffered overall loss and liability of Rs67.1 billion from 30th June to 31st December 2020,” State Minister for Parliamentary Affairs Ali Muhammad Khan replied to a query during question hour of Senate session.
Citing further details about the state, the minister said the major reasons for the loss worth Rs8.247 billion from July 2020 to December 2020 were “periodic cost, depreciation expenses and accrued markup on bank and government loans”.
