Stalemate continues over PSM’s land sale price

Parks development company seeks additional 156 acres at a cost lower than market rates

ISLAMABAD: The dispute over the sale price for 594 acres of land of Pakistan Steel Mills (PSM) could not be resolved on Wednesday as an intermediary company sought another 156 acres at Rs13 million per acre, which was lower than the prevailing market rates.

A meeting between managements of PSM and the National Industrial Parks Development and Management Company (NIP) had been convened by the Ministry of Industries to settle the price for 594 acres of land.

NIP has acquired the land for giving it to private investors to pave the way for establishing industrial units. However, its management has already allotted the land to private parties, although the pricing issue remains unresolved.



The PSM board has approved the sale of 594 acres at a price ranging from Rs5 million to Rs13 million per acre, depending on the price prevailing in the year when these deals had been negotiated.

Out of 594 acres, the PSM board had approved sale of 522 acres at Rs13 million per acre. Officials of the Ministry of Industries told The Express Tribune that NIP wanted to acquire another 156 acres at the same price.

The 156 acres could not be given at the previous year’s price as that could result in an investigation by the National Accountability Bureau (NAB), feared officials of PSM.

NIP is acquiring the land for setting up a special economic zone where investors will enjoy tax-free status for 10 years, which is a source of attraction for big investors.

“We have requested them for more land as foreign direct investment is expected to come in the country,” said Muddasar Iqbal, CEO of NIP.

He said nothing was unresolved as the PSM management would respond to NIP’s request after discussing it in the next board meeting.

In its meeting held on July 20, the PSM board had asked the Ministry of Industries to resolve the land price issue by asking NIP to immediately settle the receivables on account of sale of about 594 acres.

The latest valuation of Rs13 million per acre had been given by the Privatisation Commission based on the land valuation made for PSM privatisation by the financial advisers.

The assessors hired by the commission had valued the entire land at Rs150 billion in 2015. The evaluation was done for privatising the sick industrial unit.

If the PSM management sells the land below that rate, it may face serious problems, said the sources.

In 2007, it had been decided that 930 acres of PSM land would be given for establishing the industrial park. The matter remained pending till 2014 when both the parties again reached an understanding.

However, the beneficiaries will be handful as 500 acres have been allotted to only seven companies including International Steels, Siddique Sons, General Tyres and Kia Motors.

The PSM - the country’s largest industrial unit - has remained closed for the past three years and its employees have not been paid salaries for the last four months.



The Privatisation Commission this week sent a summary to Prime Minister Shahid Khaqan Abbasi to get cleared salaries for at least two months.

PSM was also on the privatisation list, but no progress could be made during the past four years.

Out of PSM’s total land area of 19,013 acres, about 1,950 acres have already been illegally occupied or given on lease to various departments. PSM has also given 157 acres of core land to the Port Qasim Authority for Rs9.3 million per acre. In addition, 1,500 acres have been approved for setting up a CPEC industrial park.

PSM is the only integrated steel plant in the country with installed production capacity of 1.1 million tons per year. PSM was shut down three years ago after Sui Southern Gas Company (SSGC) cut gas supplies for delay in payment of Rs19 billion worth of utility bills.

Published in The Express Tribune, August 10^th, 2017.

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