Viable option for PSM

PRIVATISATION Commission’s Board has approved a restructuring plan for the ailing Pakistan Steel Mills (PSM), which has the potential to revive this important but moribund national asset. The proposed arrangement envisages that the prime land of PSM will remain with government while its plants and machinery will be handed over to the buyer for a maximum of thirty years.
Pakistan Steel, having capacity to produce 1.1m tones of steel a year, remains shut since June 2015 because of non-supply of gas by Sui Southern Gas Pipeline Ltd, due to non-payment of gas bills. The government has been providing some funds but these even do not meet salary and pension requirements of the Mills. The PSM, once considered being a strategic asset, fell victim to neglect, inefficiency, corruption and lack of commitment on part of successive governments to restructure it and run it on purely commercial considerations. There have been some half-hearted attempts aimed at addressing the malaise, which afflicted the institution including privatisation and its possible handing over to Sindh Government, which has been opposing its privatisation, but these could not succeed due to various reasons. It is good that government has ultimately come out with an appropriate plan, which offers an opportunity to revive this dysfunctional entity. The fact that PSM is not being privatised, rather planned to be leased out that too on revenue sharing basis would not only help make it operational again but save the amounts that were periodically being injected into the Mills to keep it rolling. Steel being of fundamental importance to national development, its demand would continue to grow and the investor would have bright prospects to earn handsome profits. The new proposal, if successfully implemented, would be a win-win situation for all – the government, the investor and the employees. No doubt, about half of manpower of the Mills will have to be offered golden handshake but this was a foregone conclusion as unnecessary recruitments were made and there are also reports of ghost employees. We would propose that golden handshake should be offered to redundant staff while competent, experienced personnel should be retained.

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