Petroleum and Natural Resources Minister Shahid Khaqan Abbasi. PHOTO: AFP
“Pakistan Steel Mills (PSM) has suffered from a loss of Rs100 billion and cannot bear any further losses,” the minister further added.
Abbasi also stated that institutions that are suffering from losses will be privatised.
PSM has accumulated losses of over Rs100 billion in the last 10 years.
This is not for the first time that PSM is on the privatisation agenda. Its privatisation was taken up in 1998 but was dropped and instead it was decided to undertake restructuring of the corporation.
PSM is now on the privatisation list, once again. However, much before the government’s plan to sell 26% of its stake to prospective buyers along with management rights, Russia has shown deep interest in investing in the mill’s future. The Russians had hinted at a $1 billion investment to modernise and expand the PSM’s capacity.
In 2006, PSM was valued at Rs22 billion, in the approved bid of privatisation, which was overturned by the Supreme Court citing ‘omissions and commissions.’ Since that decision, fresh liabilities of Rs100 billion have been created, which will significantly reduce bidders’ appetite.
The corporation was inaugurated in the 1970s with the technical and financial assistance of the former Soviet Union and owns and operates an integrated steel manufacturing plant with the design capacity of 1.1 million tons per annum.
COMMENTS (15)
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First, we have to read the sign!Before entering, ofcourse. Our gov't and its policies are either not on merit but simply to feed certain group in power. Bhutto simply nationalized everything to to feed his voters for atleast 40 years if not more. Most all semi or govt institutions become winning party's harvesting fields for it's voters. Every other party try to burn these fields for the losing party. Bhutto's nationalization did what NS privatization is going to do...feed his friends and affiliates. Religion, communism, capitalism, racism, provincialism, extremism etc, are all just simple terms to define their method of "Entry" into feeding grounds.
@Chorbazari: Then you need to better educate yourself.
government’s plan to sell 26% of its stake to prospective buyers along with management rights Can anyone please let me know the logic behind this? First thing I learned in my business class was that management rights lies to the party who has at lest 51% of stake.
How else would PPP workers continue to get paid, I mean....Pakistani Steel Mill workers.....sorry, very sorry.
This is the standard of Federal Ministers. They do not think before speaking. Indirectly he has accepted that Federal government is a complete failure and cannot bring any improvement in the working of institutions such as steel mill, PIA and railway etc. and wants to get rid of these institutions by resorting to privitization
@Blunt @Saim Baig Airblue was formed in 2004 (during Musharraf era) through private capital and there was absolutely no use of public money. On the other hand, the existing offer for PakistanSteel is from Sindh Government, which is not a private enterprise but a provincial government using public funds. Even a student of basic economics an understand the difference between the 2 situations here.
If Punjab stops taking Sindh's revenue and resources such as gas then Sindh can easily pay for both Steel Mills and whole of Punjab.
I hope the there is a difference between 'privatization" and "provincialization".
Khhaqan Abbassis and Mian Manshas are the vultures hovering over national assets. Political gimmicks like this one aside, these vultures will take management rights by merely paying 1/4 th the price
No one will object!! Obviously no one will. When your Air Blue takes over PIA.
The offer is fair
The sindh government wants to go bankrupt.
/centre-will-not-object-if-sindh-govt-buys-pakistan-steel-mills-federal-minister/ so that no one can object, when Mr. Khaqans own airblue takes over PIA.
Good Reply. PPP destroyed it politically and Now speaking against its Privatization. Shame on PPP.