The Privatisation Division has been instructed to initiate due process for privatisation of Pakistan Steel Mills after the decision was endorsed by the federal cabinet presided over by Prime Minister Imran khan. This decision is in sharp contrast to what the expert group had advised the government for the revival of PSM. Government of Sindh (GoS) has vehemently opposed the use of PSMs land for settlement of outstanding liabilities and now is has been suggested that available land of PSM, other than mills may be utilized for establishment of steel related industry for generation of revenue.
The original recommendations of the expert group were
(i) PSM should not be privatised or shut down as it is a strategic asset of national interest; (ii) revival of PSM is technically possible through a phased approach targeting first downstream HRC/CRC milling operations with parallel revamp/ retrofit of upstream equipment to restore 1.1 million tons/ annum capacity followed expansion to 3 million tons/annum; (iii) in order to make PSM profitable and sustainable, the current organisation structure has to be rationalized, i.e., manpower and non-core departments and aligned with international best practices; (iv) the land assets available with PSM could be leveraged to settle the outstanding liabilities of Rs 206 billion and land should be sold exclusively for industrial purposes which will create jobs. However, a detailed review of the applicable regulations needs to be undertaken by the Government of Pakistan; (v) GoP should incentivize development of indigenous iron ore and coal reserves for consumption in PSM by offering a supportive fiscal incentive and regulatory package for mining companies; (vi) GoP should establish a Public Private Partner(s) to raise the necessary capital investment and obtain the requisite technical expertise for successful revival, expansion and subsequent sustainable operations; (vii) a number of international world renowned steel sector companies have expressed their interest in investing and in the revival of PSM. These companies include (a) Sinosteel Equipment and Engineering Company Limited; (b) Tyazhpromexport; (c) Hebei Dongghua Enterprises Group Company Limited; (d) China First Metallurgical Group Company Limited; and (e) JSC REP Holding/ Fateh Group.
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