Leading economists slammed the ruling Pakistan Peoples Party leaders for announcing that the loss making Pakistan Steel Mills will not be privatized.

Dr Salman Shah former advisor to PM on finance said that if the ruling party did not want Pakistan Steel’s privatization, its leaders should provide from their own pockets the staggering PKR 25 billion needed to keep this loss making entity on float.

He said that the top eight loss making public enterprises including PSM, Pakistan International Airlines and Pakistan Railways are eating up about PKR 300 billion every year. The PPP should pay this amount from its own accounts instead of spending tax payers money.

Mr Shah said that Pakistan Steel failed to achieve its objective of developing the engineering sector. He said that finance minister Dr Abdul Hafeez Shaikh, who master minded the failed bid of Pakistan Steel’s privatization in 2006, must quit if he fails to advance the country’s privatization program.

Analysts said that it was not the government job to run industries and commercial institutions but to create an enabling environment where businesses, investment and trade can prosper.

State run institutions, including Pakistan Steel, suffered huge losses because of massive irregularities, corruption and over staffing. Most of the successive governments have been accused of political interference and nepotism, especially in the process of recruitment.

Mr Sayem Ali an economist at Standard Chartered Bank said that the management control of Pakistan Steel should be handed over to efficient professionals in the private sector. Directors on the board should have stake in the mills so that they are willing to run it professionally.

He said that unless the control of PSM is given to the people, who belong to this profession and have a stake in the mills, it will not be run efficiently.

Mr Muzammil Aslam an economist at JS Research said that the Pakistan Steel management should be from the private sector but added that it might not attract good value because it was running in losses. He suggested renting out the whole mills on 10 to 15 year lease to a professionally and financially sound party or outsourcing its different departments to different parties.

Mr Aslam said that this strategy would do 2 things; first, the government would earn huge rent and the mills would still be government owned; second, the party taking the mills would make all efforts to turn this loss-making entity into a profit-making one,” said Aslam. After 10 to 15 years, the government would be able to decide its future.

The government might also sell off 26% shares of PSM with management rights and continue to hold majority shares as it did in the case of Pakistan Telecommunication Company Limited. By doing so the Mills would continue to remain with the government.

(Sourced from thenews.com)