PSM privatization: PM grills PC for its failure to satisfy potential buyers

ISLAMABAD: Privatisation Commission (PC) has reportedly been grilled by the Prime Minister for not completing basic work to satisfy potential buyers of Pakistan Steel Mills (PSM), well informed sources told Business Recorder.

On February 8, 2023, while presiding over a meeting on privatisation affairs, the issue related to privatisation of PSM, which was closed down some eight years ago after disconnection of its gas by Sui Southern Gas Company Limited (SSGCL). Since then, the government is paying billions of rupees as salaries to those employees who mark their attendance or visit the site briefly.

Last month, Prime Minister Shehbaz Sharif presided over a meeting on privatisation affairs and expressed his anger at the Privatisation Commission for not meeting its obligations on sell-off of public sector entities which are on the active list of privatisation.

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Insiders in PC told this scribe that the Ministry has not done its work with respect to attracting potential bidders, who have already visited Pakistan several times and sought answers to a number of queries before finalizing investment of $ 1 billion, but the bureaucracy sitting in PC failed to respond to their questions in black and white.

“How can an investor make up his mind to make a huge investment in an entity without any authentic and concrete assurances from the State or its concerned Ministry/ Division,” said the insider. During the meeting, Prime Minister directed PC to make earnest efforts to re-engage with pre-qualified bidders (only one currently) for PSM through a multi-pronged strategy to keep intact its interest in the transaction. Within this context, PC in consultation with Financial Advisors of the investor, i.e., Bank of China and China-Pak Investment Company will address concerns of the bidders.

The meeting decided that to expedite the divestment of Pakistan Steel Mill, issuance of NoC by SSGC and withdraw litigation/ stay order against PSMC (to facilitate transfer of Core Operating Assets as envisaged in the SOAs). Minister of State for Petroleum and Secretary Privatisation Commission will meet CM Sindh and resolve this issue at the earliest.

Insiders claim that issue related to Scheme of Arrangements (SOAs) has already been approved whereas arrangement with SSGC is in a final stage, adding that whenever SSGC Board will be held, a No Objection Certificate (NOC) will be approved. Audits of all years of PSM are completed while the issue related to National Electric Power Regulatory Authority (Nepra) has also been sorted out.

However, PC, tasked to attract investment failed to respond to the concerns of potential buyers who have sought some assurances. Privatisation Commission’s Director General, Malik Babar Javed did not respond to several phone calls. PC’s spokesperson also failed to provide required information regarding privatisation of Pakistan Steel Mills.

Copyright Business Recorder, 2023