The government of Sindh has urged the centre to come up with an incentive package for Pakistan Steel Mills (PSM), restore its gas supply and prepare a financial and technical report relating to privatisation of the organisation.
Chairman of the Senate Standing Committee on Finance Saleem Mandviwalla of the PPP has said the Sindh government has also asked the Privatisation Commission to provide its assessment of the mill’s financial and technical aspects.
“The Sindh government has said that any decision on PSM will have far-reaching consequences and as such requires a detailed technical and financial analysis and due diligence,” Senator Mandviwalla said in a statement issued on Tuesday.
He said the PSM’s chief executive officer had advised the Sindh government to approach the Privatisation Commission for detailed technical and financial information, especially about technological upgradation requirements of the organisation.
“With no gas supply for the past few months there are chances of permanent damage to PSM’s equipment and, therefore, Sindh has asked the federal government to immediately restore gas supply to the mill,” he said.
Senator Mandviwalla regretted that the federal government had made no commitment about reviving the PSM. The burden of the mill’s revival cannot be shifted to another entity without a clear commitment by the centre which must be communicated before any plan for divestment is put into place.
He quoted the Sindh government as saying that the past trend of privatisation suggested that the federal government cleared all liabilities of a public sector enterprise before its privatisation to make the transaction more bankable, and in some cases it had also made sizeable injection of fresh equity into such organisation. But in the case of PSM, it regretted, no such incentive package had been offered.
Senator Mandviwalla said: “It is our considered opinion that it still is not too late to plan for revival of PSM as it was barely a few months ago that the mill was operational and trained manpower is still available.
“But if operational assets are closed down for a long period or skilled manpower leaves PSM en masse due to accelerated pace of retirements or even due to golden handshake/retrenchment, the option of reviving this strategic asset will not be available.”
He said Sindh could not act in haste without appropriate due diligence and clarity regarding accompanying incentives.