Sindh has till January 21 to take or leave Pakistan Steel Mills

Centre inquired about province’s interest on October 14 last year

ISLAMABAD:

The federal government has given Sindh government a deadline of January 21 to decide about taking over the struggling Pakistan Steel Mills, which the Centre wants to privatise.

The decision was taken on Tuesday during a meeting convened to formulate a response to a Sindh government letter on acquisition of PSM. Finance and Privatisation Minister Ishaq Dar chaired the meeting, which also reviewed the status of the power sector’s privatisation.



The Privatisation Commission had received the Sindh government’s letter about three months after it offered the country’s largest industrial unit to the provincial government. The provincial government has sought clarifications from the federal government before taking a decision on PSM’s acquisition.



The province has also sought financial accounts of last five years of the steel mill, the proposed transaction structure, the tax policy and details of any bailout packages the federal government intends to give to revive the entity before its sell-off.

Signed by Sindh Finance Minister Murad Ali Shah, the provincial government has also asked whether the federal government has sought the Council of Common Interests’ approval for selling off the mill in light of the Supreme Court’s judgment of 2006.

Privatisation Commission Chairman Mohammad Zubair said the federal government had prepared a detailed response to the questions and set the January 21 deadline for Sindh to decide whether or not it wanted to acquire the entity.

The government has set the date to avoid further delays, as the provincial government took about three months in responding to the federal government’s letter. The commission had inquired about the provincial government interest on October 14 last year.

Power sector sell-off

The fate of the power sector is hanging in the balance due to the indecisiveness on the part of the Prime Minister’s Office, officials said on Tuesday.

While the issue of whether to advance the privatisation programme or roll it back has been taken up with the PM, his office has not yet taken a final decision amid growing pressure from senior cabinet members to postpone privatisation of power generation and distribution companies.

Due to this, Dar could also not give out directions during the meeting to the Privatisation Commission over the issue of selling off the Fesco.

The official deadline to receive Statement of Qualifications (SOQs) from prospective bidders expired on December 31. The commission has not yet closed the process and wants to extend the closing date for allowing international bidders take part in the bidding.



Sources told The Express Tribune that PM Nawaz’s final decision is expected after his return from Sri Lanka.

The finance ministry, they said, was in favour of privatising the power sector as the rollback of the programme would hurt the country’s international credibility and might even result in downgrading of its credit rating.

Published in The Express Tribune, January 6^th, 2016.