Valuation of land: cracks appear in PSM board

Cracks have reportedly appeared in Pakistan Steel Mills (PSM) Board of Directors (BoD) on valuation of un-allotted land of NIP by a private firm, well-informed sources in Privatisation Commission told Business Recorder. At a recent meeting of PSM Board in Karachi, Munir K Bana, one of the Board members, expressed dissatisfaction on valuation methodology adopted by M/s Anjum Adil & Associates for un-allotted land of NIP, claiming that valuation was unrealistic and irrational.
He observed that the land under valuation in the industrial estate should have been considered accordingly and not considered as real estate. "The comparison with PQA industrial estate was not appropriate where the lessee of an industrial plot is free to transfer the plot at his discretion before setting up the industry," he continued.
Secretary Privatisation Division Irfan Ali said the NIP affairs committee observed that as per the directives of PSM Board, M/s NIP was advised in letters written on June, 5, 2017 and July 10, 2017 to further allotments till settlement of issues of land allotted upto May 31,2017. Ali further revealed that M/s NIP neither replied to the letters nor acted on the advice contained in the communications and made the allotments of 46 and 12 acres to M/s Liberty Steel and Master Motors, respectively, in December 2017. The committee also noted that CEO NIP had knowledge that in December 2017, PSM had initiated the process of valuation; and observed that the interest of investors who have been allotted by NIP needs to be protected. Therefore, PSM may suggest to NIP that in order to avoid further uncertainty which may detract prospective investors from the Bin Qasim Industrial Park BQIP industrial estate, the price for the two investors may be kept as already committed by NIP. Secretary Privatisation further stated that since the rate of valuation for 2017-18 was conveyed to NIP in March 2018, the NIP affairs committee suggested that the validity of rates for 2017-18 may be extended upto September 30, 2018 if the Board deems it appropriate.
He also suggested that a committee may be constituted by PSM Board to further discuss the land valuation issues with a committee to be constituted by NIP Board.
The Board members discussed the suggestions of the NIP affairs committee in detail and after deliberations agreed with the suggestion and took the following decision: "PSM board appreciated the NIP decision to agree to the rates of cost of lease of land conveyed by PSM for 2017-18. The Board directed that PSM may suggest to NIP that in order to avoid further uncertainty which may distract the prospective investors from the BQIP industrial estate, the price of two investors ie .M /s Liberty Steel and Master Motors may stay at Rs 26 million per acre as already committed by NIP. Out of the proceeds, Rs 22 million per acre should go to PSM as cost of lease of land and Rs 4 million to NIP in lieu of development charges". The Board also extended the validity of PSM rates for 2017-18 up to September 30, 2018.
The Board also approved that Board of Investment (BoI) will indemnify PSM in case of any observation/ claim of audit para from any oversight agency, the differential amount to be borne by the BoI. The lease price payable to PSM will not be adjustable against past liabilities outstanding against PSM. The land will revert back to PSM on expiry of lease and the transaction will be subject to approval of Privatisation Commission and owner shareholder ie Government of Pakistan.