The govt. has decided not to privatise Pakistan steel mills (PSM) after reviewing the report presented by the expert group. According to the report PSM can be revived under the Public private partnership (PPP) mode. Prime Minister’s Advisor on Commerce, Textile, Industries and Production and Investment, Abdul Razak Dawood was quoted saying “How can it be privatized? It is a national asset.”
Thar coal is now being used successfully for power generation; therefore, this coal may be used in PSM. Moreover, local iron reservoirs in Kalabagh Chinniot and Baluchistan can be utilized for PSM. It was suggested that steel products of PSM should be internationally competitive.
Countries like Iran and Turkey also have same type of steel mills; however, they have substantially increased their steel mills capacity during the last ten years. It was also suggested that Financial Advisor may be appointed for the proposed revival plan on PPP basis.
The proposed revival mechanism of Pakistan Steel Mills is as follows: (i) carve out liabilities from PSM and land assets could be used for liability settlement; (ii) induct TAC and invite bids for PPP from prequalified bidders; (iii) GoP and selected bidders to agree on profit sharing mechanism (GoP equity to be value of land, infrastructure, and salvaged facilities) (iv) propose appropriate severance to employees not selected to continue service.