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ISLAMABAD: A parliamentary panel was informed on Thursday that the privatisation of Pakistan Steel Mills (PSM) was halted after three out of a total of four Chinese companies – which had shown interest in the bidding process – withdrew their interest.

In a briefing to the Senate standing committee on industries and production, which met here with Khalida Ateeb in the chair, the federal secretary for the Privatisation Division, Jawad Paul, said that the PSM was included in the privatisation list on June 17, 2019, but it was halted after three Chinese companies withdrew their expression of interest.

He said that due to the global decline in steel demand and adverse economic conditions, three of the Chinese companies withdrew their interest.

Chairman for engaging with Chinese SOEs to help revive PSM

“Initially, four Chinese companies expressed interest in the bidding process. However, due to the global decline in steel demand and adverse economic conditions, three of these companies withdrew their interest,” he added.

Consequently, he added, in a meeting held on October 6, 2023, the Privatisation Commission Board decided to halt the privatisation process of PSM.

This decision to halt PSM privatisation was made because having only one bidder raised concerns about transparency, he said, adding a technical due diligence report indicated that an investment of approximately $584 billion would be necessary to restore the Steel Mills Plant to its original capacity of 1.1 million metric tons per annum.

“The matter has now been submitted to the federal cabinet for a final decision,” he added.

In a briefing to the committee, the PSM officials said that the organisation generates Rs5 billion in revenue from sales, but suffers a loss of Rs12.8 million due to scrap theft.

Additionally, the company incurs an annual loss of around 30 billion rupees, they added.

The committee expressed dissatisfaction over the lack of implementation of its recommendations and regretted that despite employing over 500 security personnel, scrap theft at PSM has not diminished.

The committee directed the Ministry of Industries and Production to present their plans for the future of PSM at the next meeting.

The members of the committee also expressed annoyance over the absence of the caretaker minister for industries and production Gohar Ejaz after he skipped a meeting of the committee without any intimation.

It said the caretaker minister must ensure his presence in the next meeting next time, saying the meeting of a house committee is not a joke.

In discussing the role and functions of the Sugar Advisory Board (SAB), officials informed the committee that the board comprises ministers and secretaries of Commerce, National Food Security and Research, Industries and Production, chairman FBR, as well as chairman and zonal chairpersons of the Pakistan Sugar Mills Association and the Association of Farmers.

Additionally, each provincial government is represented by one member. The officials highlighted that the primary role of the Sugar Advisory Board is to provide input on sugar demand, sugarcane production, and estimated prices of sugarcane and sugar in the country.

Besides, with assistance from the FBR, the SAB has implemented a track and trace system in every sugar mill. The committee expressed satisfaction with the Sugar Advisory Board and expressed hope that the SAB would play a significant role in controlling sugar smuggling and stabilising sugar prices in the country.

Copyright Business Recorder, 2023

Comments

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Tariq Qurashi Oct 27, 2023 09:40am
As far as I know this is a Russian Steel Mill. The Russians and Chinese should be asked to bid again. In no circumstances should the steel mill be managed by any government or semi-government entity, because this will lead nowhere. The SIFC should take control of this process and push it forward, otherwise privatization will never happen.
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Alwasif Oct 27, 2023 10:40am
Is the $584 billion a typo? It’s too huge an amount to make sense
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Abba ji Oct 27, 2023 12:23pm
Funny Pakistani economy.
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Love Your Country Oct 27, 2023 12:24pm
The sell-off process takes a long time and the bidders are aware that the next civilian govt may stall the process due to political pressures and court's interventions. Our record is checkered to say the least.
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Usman Oct 31, 2023 09:54pm
Remember when President Musharraf almost sold this White Elephant than came the Iftikhar Chaudhary who reversed this wise decision and since than this the nation till today due to that decision.
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