Employees serving/retired, contractors, dealers, suppliers and creditors of Pakistan Steel Mills (PSM) have appealed to the Prime Minister Imran Khan to review its sell off process.
They draw attention of the Prime Minister towards the recent non-transparent move by Privatization Commission (PC) for privatization of PSM by inviting Expression of Interests (EOI) from the interested private parties/ investors for acquisition of 51%-74% issued share capital together with management control of the Steel Corp (Pvt) Limited, a wholly owned subsidiary of PSMC (Annex-A).
This action of PC inviting “EOI & Road Show” is without deriving any lessons from previously attempted ‘PSM Privatization scam-2006’ which was annulled by the Supreme Court of Pakistan through historic verdict in CP 9/2006.
The present similar attempt by PC is full of flaws, irregularities and without protecting the interests of stakeholders/nation will further lead to financial disaster and losses to the national exchequer.
In this regard, the following facts are submitted for kind consideration, to review the non-transparent privatization of Pakistan Steel Mills (PSM).
In a letter to Prime Minister Imran Khan, Stakeholders Group said that PSMC is the only integrated Steel Plant of the country, which is also a strategic asset of the nation.
It is capable of producing 1.1 million tons per year (MTPY) of raw steel with diversified output product mix of long (Billets, Blooms, Slabs) and flat (Hot Rolled, Cold Rolled and Galvanized coils/ sheets) steel products, which is expandable up to 3 MTPY as per initial detailed project report.
It was established with techno-economic collaboration of the former USSR and came into operation in phases during the period of 1981-85.
Although having a sub-economic installed capacity of 1.1 MTPY, the Mill earned operating profit for 23 years from 1985 to 2008 and registered a net profit in 13 financial years out of these 23 years.
The Mill started registering losses after FY 2008-09 due to massive corruption and mismanagement, which was also noticed by the apex court of the country but the successive governments failed to investigate factors leading to losses and bring the culprits responsible to justice and the plundered money could not be recovered.
Recently, Minister MOI&P Mukhdoom Khusro Bakhtair visited PSM but not met with employees, requested meeting in presence of BOD/Management.
When the PTI government came into power in August 2018, PSMC had accumulated losses of Rs173 billion and liabilities of Rs210.5 billion as on June 30, 2018.
PTI promised in its election campaign to revive the Mill in the Public/ Government sector with job protection of employees but changed its stance in 2019 by placing PSM in the privatization list.
For this purpose, initial consultancy services were assigned to M/s HUBCO without any tendering/ competitive bidding by MOIP but their report was not endorsed by the PSMC Board. Resultantly, MOIP illegally removed the previous Chairman PSMC Board.
Abdul Razzaq Dawood appointed a US citizen Aamir Mumtaz as Chairman PSM Board in 2019, whereas prior to this he had never served as Board member of any Public or Private company of Pakistan nor he fulfilled the requirements of SECP to be appointed as Board member of a big Public Sector company like PSM.
Further he also didn’t have any experience of integrated steel plants and the steel industry.The present management has forcefully retrenched the trained, experienced and skilled manpower of around 5,500 employees without any lawful authority and is further planning to retrench the remaining manpower without any Golden Handshake scheme as offered in privatization of other organizations/ entities in the past.
Such a large-scale retrenchment of thousands of skilled and experienced employees of PSM prior to its revival is unprecedented in the history of the country.
On the other hand, PC and MOIP officials are constantly misguiding the Standing Committees, CCOP and ECC that this retrenchment is voluntary/ golden handshake, whereas the forcefully retrenched employees are only offered with their retirement dues without any extra benefits and retrenched employees are still without receiving their dues awaiting release of funds by the Government.