• Hammad says ‘management control will be handed over to private party’ • According to him, Sindh govt can take PSM ‘if it bids right’
ISLAMABAD: Minister for Industries and Production Hammad Azhar on Saturday came down hard on Pakistan People’s Party (PPP) for “ruining” the Pakistan Steel Mills (PSM), saying it turned a profit-making national asset into a heavy loss-making and bankrupt entity.
Speaking at a presser, Azhar, after PPP Chairman Bilawal Bhutto-Zardari lashed out at the PTI government for laying off over 4,500 PSM employees, categorically said that it was during the PPP government, the PSM became a heavy loss-making and bankrupt entity.
"Capacity was taken down to 40 per cent and then PML-N shut it down in 2015," the minister pointed out. The minister clarified that the PSM land was not being sold out, as the government was going to revive the public entity by involving a private investor. He said the PSM has 19,000 acres of land, of which there will be a lease agreement on 1,200 to 1,300 acres of land to run the PSM operations. This would be done in “the most transparent” manner as per privatisation rules, he said, adding that it would be federal government’s effort that an international player entered into a partnership with the government.
“The Sindh government can participate in bidding and if it bids right, it can take the steel mill,” Azhar quipped.
He said the Privatisation Commission would formulate a structure and inform about the liabilities of PSM, adding that all matters, including land leases, would be in accordance with the law. Azhar clarified that the management control would be handed over to the private party, adding that “whenever the government tried to manage business entities, it made the situation worse”.
He said: “This is the reason the management control of the PSM will be with the investor. The private investor will run the mills with new technology and the right people.”
He said the PSM employees who had been laid off would be given, on average, Rs2.3 million per employee, adding that Rs10 billion had to be paid to over 4,500 PSM employees.
He said the pension dues of the PSM employees from 2013 onward were cleared two weeks ago through an amount of Rs24 billion. “If the employees are not laid off then the government will have to pay several hundred billions just to keep the PSM afloat,” he added. About Rs10 billion would be paid to the retrenched employees, he said, adding that successive governments had paid Rs92 billion bailout packages to the PSM so far. The minister said that government had to take tough decisions by removing over 4,500 PSM employees, adding that the PPP and the PML-N “who completely destroyed the entity would now do politics over it.
He said the state-owned entities had been inflicting losses of around Rs200 billion on the national kitty, which was more than the annual defence budget of the country. Azhar said the PSM had been closed for the last five-and-half years, while the government had to pay salaries and pensions of billions of rupees to the employees “for nothing”. He said the operational capacity of the PSM was reduced to 40 percent during the last PPP government, while in this tenure it registered a loss of around Rs100 billion. He said the PPP during its tenure had inducted thousands of employees into the mills, which was beyond its capacity.
Likewise, he added, during the PML government, the operational capacity was further reduced to 20 percent from 40 percent and then to six percent “and ultimately, it was shut down in 2015”.
The minister said: "In 2008, the PSM was a profit-making institution. In the same year, PSM had Rs8 billion in its account”. The minister said that if previous governments had taken “decisions”, billions of rupees in salaries and pensions would not have to be paid to the PSM employees. "If the same money had been spent on different sectors, thousands of new jobs would have been created by now," he added.
Copyright Business Recorder, 2020