Pakistan Steel Mills (PSM) Board has reportedly asked Ministry of Industries and Production (MoI&P) to remove the name of those members from the experts group who run their own steel business, well-informed sources in the MoI&P told Business Recorder. The Board took this decision in its meeting held January 21, 2019 under the chairmanship of Engineer Abdul Jabbar Memon, who is against privatisation of PSM.
The Experts Group headed by CEO Hubco, Khalid Mansoor, is preparing future plan for PSM to be submitted to the federal cabinet for further action. Chairman PSM briefed the Board of the decision of the government to operationalise PSM by delisting it from the active list of privatization.
Giving an overview of the directives of previous Board meeting on the formulation of the way forward, he stated that the Board has already directed PSM management to prepare a working paper to propose viable options for operationalisation of PSM. On the directives of the Board, PSM management was already preparing a presentable paper on future plan/way forward strategy for re-operationalisation of PSM.
In view of significance of the matter, a meeting of Business Development Committee (BDC) was also convened on 16 and 17 January 2019 to discuss options to be proposed to the Government for putting the plant back into operation with existing production capacity of 1.1 million tons per annum and its further expansion up to 3 million ton/annum.
The BDC in its meeting discussed various options for re-operationalisation of PSM which have higher probability of financial sustainability, least cost, and early restart while keeping the present Human Resource base intact. The committee held extensive deliberations on the working paper prepared by PSM management and felt that the comparison of Sino Steel report and PSM's analysis on Sino Steel's report needs further improvement as abrupt shutdown of natural gas supply in 2015 had adversely affected the plant's machinery. Due to this, it was perceived that the capital repairs/replacement of plants and equipment of PSM would be the major cost component in the revival plan of PSM. The committee directed the PSM management to update estimated rates for repairs/replacement of PSM's plants and machinery. In this regard, the committee directed all the Directorate Incharges to furnish the requisite and relevant information to give final shape to proposals to be put-up to the Government for rehabilitation of the plant to bring it back to initial production capacity of the mill.
After detailed discussion, the Board directed PSM management to continue working to determine viable options for re-operationalisation of PSM.
Engineer Abdul Jabbar Memon apprised the Board that MoI&P has conveyed the offers submitted by 6 companies who have shown an interest to become part of re-operationalisation plan of PSM. Corporate Secretary apprised the Board that further information has been requisitioned from these companies for better understanding of the proposals being offered by the said companies. As soon as requisite information is received, the same will be shared for consideration of the Board/PSM management and committees working on revival plans of PSM.
The Board noted that the Expert Group is entrusted to work for exploring various options for re-operationalisation of PSM and its role should be advisory in nature. Further the Board also noted that it will work on pro-bono basis without incurring any expense or liability on the part of the Government. The Board further noted that for confidentiality of information, the Group will sign a confidentiality agreement with the Government. The Board moreover noted that the Group shall propose various options for revival of PSM before placing it before the ECC.
After the point wise analysis of the notification by the Board, the special invitee, Mathar Niaz Rana Additional Secretary-II, MoI&P suggested that the Expert Group may be asked to present its report in the next PSM Board meeting wherein PSM may also share its working with the group so that a collaborative paper can be prepared.
The Board noted the proposal of Mathar Niaz Rana, however, the Board directed that all data sharing will be done through the office of Corporate Secretary and the Secretary will seek guidance of CEO before doing so in order to ascertain the relevance of the information being transferred/passed on/shared.
After detailed discussion, the Board argued that there is a requirement of change in the constitution of the Expert Group. The Board further deliberated that the constitution of the group may not have experts from competing secondary steel industry. The Board requested MOI&P to delete Technical Experts and Steel Business from the notification.
According to latest development, Senior Joint Secretary/ CEO PSM, Dr Muhammad Iqbal has been transferred and posted as Secretary Federal Public Service Commission. This implies once again PSM is without a CEO.
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