As Pakistan Steel Mills (PSM) continues to pile up liabilities, the government is considering leasing the country’s largest industrial complex to a private concern for 45 years under a revenue sharing arrangement, and laying off almost 5,000 employees.
On Monday, a transaction committee discussed various options in this regard, based on which the Privatization Commission’s board will meet on Tuesday (today) to decide the duration of the lease. Sources privy to the development said a meeting of the cabinet committee on privatization has been called over the weekend to approve the transaction structure.
“The present state of PSM is due to unchecked corruption, inefficiency, over-employment and the government’s lukewarm attitude towards its revival,” summarized a report to the Economic Coordination Committee by the secretary of the industries ministry.
A previous attempt to sell the PSM by then prime minister Shaukat Aziz to a Saudi-led consortium for Rs21.6 billion ($362 million) was struck down by a landmark Supreme Court ruling in June 2006, which practically led to a halt of the privatization programme for almost eight years.
The PSM’s accumulated losses and liabilities, which stood at Rs26bn at the end of 2008, have increased to around Rs415bn, including Rs166bn payable liabilities.The government has injected over Rs85bn out of the federal budget for various bailout packages since than.
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