And that's the rub: PSM has no solution

Advisor to the Prime Minister on Finance Dr Hafeez Sheikh, inducted into the cabinet on 18 April 2019, while chairing the Economic Coordination Committee (ECC) meeting dated 3 May agreed to placing Pakistan Steel Mills (PSM) on the list of privatisation once again, on the advice of the Ministry of Industries and Production (MoIP) - a decision contrary to that taken on 31 October 2018 by the CCoP under the chairmanship of Asad Umar. Sheikh directed the recommending Ministry to place the matter for approval before the Cabinet Committee on Privatisation (CCoP).
The cabinet, briefed on the matter, ratified the 3 May ECC decision, and directed the two advisors heading MoIP and Ministry of Finance to oversee the revival plan of the PSM. It appears that while the government does wish to privatise the PSM but it wants to take the Private-Public Partnership route. The mandate of the Privatisation Commission does not allow it to indulge in Private-Public Partnership and as such the commission is reluctant to do it. Their reluctance despite the ECC and CCoP's decision is understandable in view of possible questioning by the NAB and the courts.
The PSM is in a royal mess. Presently, it is on 'Auto Pilot' as it does not have a CEO or a Board of Directors. Therefore any and all decisions that are taken lack legal sanction. On 26 June 2019, the ECC was informed of serious financial constraints facing the PSM making it imperative for the government to reactivate privatisation as a viable objective including: (i) inability of PSM to pay its dues to its retired employees leading to litigation by around 3000; (ii) the court ruled that the issue be resolved within 90 days from the date of order of November 15, 2018; (iii) outstanding dues remaining are 15.86 billion rupees, an amount which if not released would possibly constitute contempt of court; and (iv) with limited fiscal space, a legal opinion has been sought from the Ministry of Law and Justice.
The latest situation is that the CCoP has pressurized the Privatisation Commission (PC) to proceed with recruitment of a transaction advisor on public-private partnership (PPP) basis, a direction that is outside the purview/mandate of the PC. The Advisor to the Prime Minister on Finance has held the portfolio of Privatisation Minister during the Musharraf regime and as the Minister of Finance for three years from 2010 onwards. He is well aware of the mandate and functioning of the Commission and is ideally placed to have this confusion resolved. As if matters were not complicated enough Special Assistant to the Prime Minister on Information and Broadcasting Firdous Ashiq Awan, while briefing the media on the 3 July 2019 cabinet decisions, revealed that the cabinet has decided to scrap the privatisation plan of PSM but added that foreign investors would be invited to run the mills. This she added was in line with the ECC decision to run the mills on a PPP mode.
There are around six foreign companies that have already indicated an interest in purchase of PSM - from Russia, China, and South Korea - though it is not yet clear whether they would be interested in managing/running the mills instead of an outright purchase. It maybe recalled that the PML-N identified PSM's serious financial constraints accounting for a massive annual drain on the treasury and vowed to restructure and privatise PSM in their 2013 pre-election manifesto. Five years passed without any positive action/outcome and periodic disbursements from a severely cash-strapped treasury allowed the PSM to meet the salaries of existing and retired employees with the mills remaining non-operational.
Ten months have already elapsed of the Pakistan Tehrik-i-Insaaf government and while decisions have been taken, like during the PML-N tenure, they have yet to be implemented. One would hope that the government does not follow the PML-N route in this regard and takes appropriate action to deal with this white elephant once and for all.