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Pakistan Steels Mills awaits appointment of financial adviser despite incurring heavy losses

Pakistan Steels Mills awaits appointment of financial adviser despite incurring heavy losses

ISLAMABAD: The Finance Ministry has failed in hiring of financial adviser to seek a strategic partnership for Pakistan Steel Mills (PSM) despite passage of six months of the decision.

The Privatization Commission (PC) took the decision in this regard on July 22 last year; however the process of hiring the financial advisor seeking a strategic partnership for PSM is still in progress.

A well-placed source at Finance Ministry told Customs Today that the Cabinet Committee on Privatization (CCOP) approved the privatization program for early implementation which inter alia included privatization of Pakistan Steel Mills Corporation in a meeting held on October 3, 2013.

The source said that PSM has suffered huge losses and its accumulated liabilities stand at over Rs 120 billon by mid of last year. “Despite several financial assistance packages between 2008-2014 the PSM has continued to file in meeting its productivity benchmarks and key performance indicators (KPIs) including capacity enhancement beyond 25 percent. As a result, a monthly salary impact of approximately Rs 900 million is being borne by the government through the bailout package,” the source said, adding that the overall performance achievements and losses sustained by the PSM in the past years were not pleasant.

The source said that the Privatization Commission had conducted privatization transactions of Rs 106 industrial unites including unites in automobile, cement, chemical, engineering, fertilizer, ghee, rice, roti plants and textile sectors so far.

“The industrial units were sold or privatized through various modes in accordance with privatization commission ordinance 2000” the source said adding that the rules and regulations like sales of assets, sale of shares through public auction and tender public offering, management and employee buyouts were also followed in the light of said ordinance.

The source observed that the units were sold to successful bidders the original owners from whom these units had been nationalized in the past, had also not been barred from participating in process of privatization.

“Moreover, there is no such proposal under consideration of the government for handing over the industries to their original owners without following proper procedure of privatization” the source said while responding to a question about the status of original owners of the state owned units on the privatization list.

“In case government decides to further privatize industrial units the original owners can participate in the privatization process” the source added.