PC to submit PSM restructuring plan to Cabinet

Privatisation Commission (PC) is to submit a comprehensive restructuring plan of Pakistan Steel Mills (PSM) to the federal cabinet for approval, official sources told Business Recorder. On March 6, 2018, during a discussion on privatisation of PSM and PIA, the cabinet was informed that the government had no intention of providing either PIA or PSM. However, efforts are being made to restructure the organisation. It was further informed that PSM land would not be sold though its plant and machinery were proposed to be leased to third part for operation based on a concessional model.
The sources said Pakistan Steel Mills'' liabilities crossed Rs 193 billion by December 31, 2017. The loans of National Bank of Pakistan (NBP) were Rs 54.297 billion of which Rs 36.424 billion was principal amount and Rs 17.873 billion was accrued interest. PSM''s subordinated loans stood at Rs 4.269 billion whereas and GoP loans were Rs 45.098 billion.
According to sources, payables to employees were calculated at Rs 50.445 billion of which the amount of gratuity was Rs 19.576, leave encashment Rs 3.917 billion and provident fund Rs 26.851 billion. Accrued expenses were Rs 27.868 billion; of which the natural gas bills were Rs 20.281 billion, water charges Rs 1.103 billion, payable to K-Electric , Rs 410.4 million, medical expenses, Rs 467 million, , salaries and arrears Rs 4.336 billion and others, Rs 1.269 billion. The liabilities of creditors stood at Rs 7.019 billion, of which Rs 5.797 billion were of import creditors and Rs 1.222 billion local creditors.
The sources said total deposits and advances were Rs 2.915 billion which include Rs 1.824 billion deposits and Rs 1.091 billion advances. Other liabilities were at Rs 1.666 billion.
The sources further stated that the Board directed PSM management in its 393rd meeting held on 12.12.2017 to arrange and finalize the fresh valuation of leftover/unallotted land in NIP on priority through a SBP listed approved valuator. In compliance of directives of Board, PSM has awarded the contract to M/s Anjum Adil & Associates vide LOA dated 24.1.2018 for evaluation of about 158 acre land against a lump sum amount of Rs 753,000.00 (Seven hundred thirty five thousand only).
The matter was discussed in the detail in 394th board meeting held on 8.2.2018 in the presence of CEO NIP wherein it was concluded that up to June 30th, 2017 M/s NIP has allotted total area of 224 acres. Hence the remaining allotable land during the year 2017-18 and afterwards is 526 acres. The board directed PSM management for the evaluation of all unallotted land. As the contract for evaluation of 158 acres of land had already been awarded to M/s Anjum Adil & Associates, therefore, PSM asked M/s Anjum Adil & Associates vide letter dated 15.2.2018 for evaluation of further 368 acres land in terms of provisions available in PPRA Rules 2004.
M/s Anjum Adil & Associates stated vide letter dated 19.2.2018 that as per their general schedule of charges for such assignments their professional service fee is around Rs 1,700,000/- but in view of special request of PSM management and keeping in mind the limitation of PSM management, they have quoted a professional fee of Rs 210,000/- including Rs 100,000/- as out of pocket expenses.
M/s Anjum Adil & Associates have been asked to undertake valuation of remaining 368 acres land within 15% of original contract price. They have also been assured that out of pocket expenses will be reimbursed on actual basis. M/s Anjum Adil & Associates submitted valuation report for 158 acres allotable land. As per the report, the valuator has valued the industrial plots at Rs 22/- million per acre and the commercial plots meant of high rises at Rs 35/- million per acre.
The sources said the valuation report of land will be submitted to the PSM Board on Friday (today) for consideration and further directions of PSM Board.
Other items of the agenda would be as follows: (i) retirement benefits details upto June 2018; (ii) update on sale of inventory; (iii) essential promotions;(iv) proposed carrier planning policy for diploma of Associate Engineers ;(v) hot preservation of COB-1 and payment of outstanding dues of M/s Concord;( vi) outstanding payment of ship-owner ie $ 4,466.52480 equivalent to Rs 473 million (appox) 10 per cent balance freight against various vessels of coal and iron ore cargo; (vii) outstanding payment of M/s JSC VO Tyazhpromexport Russia; (viii) arbitration case in the international court Pakistan Steel verses M/s Sesa Goa Ltd India;(ix) arbitration proceeding between Iran Iron ore company verses Pakistan Steel in the High Court of Sindh at Karachi; (x) arbitration between M/s Besrock (Pvt) Ltd and PSM and; (xi) M/s Sociedade - De-Femento Industrial Private Limited (India) verses PSM.