PSM rehabilitation: BoD likely to meet on July 14 to approve plan

Pakistan Steel Mills (PSM) Board of Directors (BoD) is likely to meet on July 14, 2017 to approve new rehabilitation plan and sale price of 1,500 acres of land to be used for establishment of Special Economic Zone (SEZ) under the China Pakistan Economic Corridor (CPEC). The Board headed by Engineer A Jabbar Memon will also discuss a new rehabilitation plan meant to revive the mill despite the fact that the Privatisation Commission (PC) is not mandated to support any such move.
The Board in its last meeting also discussed the establishment of SEZ near PSM Karachi in the context of the CPEC. After thorough discussions the Board advised the management to get the land valuate at the earliest so that the same can be offered for the purpose as soon as possible in order to activate the SEZ. A committee headed by Chairman PSM Board has been given the assignment to finalise the price of land. PSM had struck a deal of Rs 13 million per acre but its prevalent price is Rs 18 million per acre. The committee will finalise the actual price of land.
The sources said, Economic Co-ordination Committee (ECC) of the Cabinet had approved a price of Rs 7 million per acre for non developed land of PSM, of which 21.75 per cent share will go to PSM whereas the rest of the amount will be given to National Industrial Parks Development and Management Company which is to develop SEZ. According to the formula, the price of PSM land had to be revised after every five years and it was due in 2012 but neither party could do so.
National Assembly Standing Committee on industries and Production (MoI&P) is also meeting on July 13, 2017 under the chairmanship of Asad Umar. Secretary, Privatization Commission and Chairman/Chief Executive Officer (CEO), PSM will give a presentation on the rehabilitation plans of Steel Mills. Well-informed sources told Business Recorder, PSM management is not extending cooperation to the Board of Directors (BoD) which is preparing rehabilitation plan mainly due to lack of capacity.
The ministry is also not happy with the new PSM CEO Mohsin S Haqqani, who reportedly is not interested in affairs of the Mills because he is to retire in a couple of months. During the previous meeting, Chairman Standing Committee had expressed his annoyance at the absence of CEO PSM and threatened to issue his arrest warrants but later cooled down after Secretary Industries and Production (MoI&P), Khizer Hayat Gondal explained that the CEO took charge only a couple of days ago.
The sources said PSM Board''s special committee which is preparing Business Plan is not getting required cooperation from PSM management due to internal rifts with the organisation. "PSM is not sharing required data or are sending data that is not relevant due to internal rifts," the sources said, adding that answers of financial matters were being sent by engineers who are not aware of ABC of financial terms. However, management has now assigned the task to the relevant officials who are co-ordinating with the Board committee which is preparing new business plan.
The committee has to tailor a business plan which will show the required funding to revive PSM, payment of debts, settlement of utility bills and the required equity and profitability. The sources said the Economic Co-ordination Committee (ECC) has also directed Ministry of Industries and Production to make a detailed briefing to it on human resource (regular/contact/daily wages employees currently employed) engaged in Pakistan Steel Mills with justification.
On March 22, 2017, the then Secretary Privatisation Commission, Sardar Ahmad Nawaz Sukhera revealed that the federal government is working on a new integrated module to privatise PSM which would comprise settlement of liabilities hovering around Rs 200 billion and making the Mills operational. The mills are dysfunctional due to disconnection of gas supply by SSGC as the former is unable to clear Rs 40 billion bills including late payment surcharge.