Pakistan asks China to bid for PSM

Reiterates earlier decision of excluding closed industrial giant from CPEC framework

Shahbaz Rana April 02, 2021
A man walks past machines at the hot strip mill department of the Pakistan Steel Mills (PSM) on the outskirts of Karachi, Pakistan. PHOTO: REUTERS


Pakistan on Thursday urged China to take part in competitive bidding for buying Pakistan Steel Mills (PSM) and reiterated its earlier decision of excluding the closed industrial unit from the China-Pakistan Economic Corridor (CPEC) framework.

The issue of selling the country’s largest industrial unit to China under a government-to-government deal was discussed during a meeting between Finance Minister Hammad Azhar and Chinese Ambassador Nong Rong, a government official told The Express Tribune.

During the 9th Joint Cooperation Committee (JCC) of CPEC meeting, Pakistan had given an understanding to China that it wanted to include PSM in the CPEC framework.

Projects that are executed under the CPEC framework are not open to all international investors and only Chinese investors can participate in the bidding process.

However, over a year ago the government decided to keep PSM outside of the CPEC framework based on input from the then finance adviser, Abdul Hafeez Shaikh. Pakistan is keen to seek Chinese participation in the competitive bidding process as it wants to sell the entity that had been closed six years ago. However, sources said that China’s position on the matter was that the PSM revival project may be developed under the Joint Working Group on Industrial Cooperation of the JCC. Metallurgical Corporation of China Limited was keen to invest in the steel mill.

However, the officials said that Pakistan had finally informed Chinese authorities that the mill would be sold through the competitive bidding process.

Prime Minister Imran Khan is eager to complete the PSM transaction at the earliest but the matter is moving at painstakingly slow pace.

Finance Minister Hammad Azhar said on Wednesday that bidding for PSM privatisation would be held this week. This week, the Ministry of Privatisation took notice of the situation and called for resolving the issues related to the formation of a new subsidiary, use of jetty and conveyor that were delaying the privatisation process.

During the meeting, both sides also discussed industrial cooperation and progress on the Special Economic Zones (SEZs).

Sources said that Pakistan was keen to sign a framework agreement on industrial cooperation during the next JCC meeting. However, the Chinese authorities were not willing to enter into another framework agreement. Pakistan is trying to show progress on at least three SEZs - Rashakai SEZ in Khyber-Pakhtunkhwa, Allama Iqbal SEZ in Punjab and Dhabeji SEZ in Sindh. The development agreement for Rashakai SEZ had been concluded in September last year, however, there were delays in installation of allied facilities and introduction of preferential policies.

Hammad Azhar stated that CPEC was of utmost importance for Pakistan, according to a Ministry of Finance press release. It would enable the country to enhance industrial production, upgrade energy and communication infrastructure and improve connectivity with the region, it added. CPEC would generate abundant employment and investment opportunities in Pakistan and beyond, said Azhar. The Chinese ambassador outlined that CPEC was of immense importance for the Chinese companies and would expand and strengthen economic cooperation for achieving common objectives and guarantee a prosperous future for both the nations.

The finance minister stressed the need for early completion of projects falling under the umbrella of CPEC. Time was of essence in meeting project deadlines so that economic benefits could reach the people of both countries and contribute to the overall economic growth and development, he stressed.

The CPEC Authority chairman assured full support and assistance to the Chinese ambassador for expediting progress in the communication and transportation sectors on the occasion. Towards the end, the finance minister lauded China for its continuous support in provision of Covid-19 vaccine for fighting the disease effectively.

Published in The Express Tribune, April 2nd, 2021.

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