PSM board to be dissolved

ECC told that mill’s administration leased out land to private sector for setting up 54 industries

ISLAMABAD:

After the shocking disclosure that the Pakistan Steel Mills (PSM) administration had leased out land to the private sector for setting up 54 industrial units, the caretaker government has directed the industries ministry to dissolve its board.

It has also directed the PSM administration to immediately stop leasing out the mill’s land to any group or individual.

In a recent meeting of the Economic Coordination Committee (ECC) of the cabinet, the issue of the PSM’s liabilities was taken up.

The ECC was informed that the PSM board had authorised the leasing out of the mill’s land to investors for establishing industries for 50 years.

Subsequently, 54 different industries were set up on PSM’s land.

The economic decision making body considered a summary submitted by the finance division related to ECC’s decision on the PSM's liabilities towards the government and noted the position.

Read also: 1,500 acres at Pak Steel Mills allocated for industrial park

An immediate need was realised to stop the leasing out of the PSM's land to any organisation or individual.

The policymakers raised concerns that there should be no daily wage workers in the PSM if it was closed and the ECC agreed to it.

The ECC was further informed that the Sui Southern Gas Company (SSGC) had given a notice to the PSM to clear its outstanding dues or its supply would be stopped.

The ECC directed the industries ministry to chalk out a viable plan, with a roadmap, for the PSM, for its consideration.

It was explained to the ECC that a comprehensive way forward on all the issues related to the PSM was being prepared.

The ECC was further informed that a roadmap would be presented to the forum about the future of the steel mill.

Read: PSM excluded from privatisation agenda

The finance division pointed out that on September 19 this year, the ECC had sought details about the total cost borne by the federal government to meet the expenditure of the PSM since its closure.

The PSM has not been operational since June 2015 and the government has been providing financial resources for its liabilities including those related to its employees.

The total amount provided to the PSM in connection with the employee-related expenses and SSGC liabilities since 2009-10 to November 2023 stands at Rs105.998 billion.

Besides, the government picked up the markup payment as equity investment against the PSM's loan amounting to Rs7.757 billion since the fiscal year 1999-00.

The total amount paid as markup payment was Rs11.053 billion from FY 1999-00 till FY 2023-24.

It was mentioned that the PSM repaid only an amount of Rs3.50 billion during 2007 and Rs500 million in June 2022 to the consortium of banks, leaving an outstanding balance of Rs3.767 billion.