Another roadblock for PSM

There are certain plans and statements, which when made by public officials, makes one wonder how these officials were put at the helm of decision-making in the first place. Extending some benefit of doubt to such officials, one hopes against hope that perhaps there was some logic behind the ‘wisdom’ they proffered. But the latest development, which sees the Ministry of Industries and Production and the Pakistan Steel Mills (PSM) management agreeing to sell off the mills’ land to clear SSGC’s dues, seems ludicrous, at best. In an economy growing at its fastest pace in years, steel manufacturers are running from pillar to post to raise equity as they bet on increased demand stemming from the initiation of development projects. However, the PSM still continues to find itself in a rut, created by inefficiency and corruption that dates back years.

The Chinese, in a report, have confirmed what everyone knew all along: the PSM is plagued with inefficient management and needs an overhaul. The PSM, on its part, says it needs government support and millions of dollars to stage a comeback. The government, on the other hand, is reluctant to spend the little taxpayers’ money it gets on an ailing entity. At the same time, its attempts to privatise the PSM have been met with fierce resistance from the Sindh government, which does not want to buy it, but does not want the centre to sell it off either. The SSGC is claiming over Rs37 billion in dues from the PSM and has suspended supply to it till payments are cleared. In the midst of this drama, the proposal to transfer PSM’s land to SSGC makes little sense except to the PSM management, as this will entail that the steel mill will clear billions owed to the SSGC without spending a nickel. But what on earth is the SSGC supposed to do with land that is part of an industrial unit? The original transaction structure did not even include land transfer as part of the sell-off. While the PSM management will make a push for this proposal, it makes little sense for the SSGC to accept it, which also claims to be bleeding money every year.

Published in The Express Tribune, October 23^rd, 2015.

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