Pakistan to Invite EoI for PSM Revival by March 2021
Pakistani media reported that investors from China, Russia and Korea are taking interest in the revival of Pakistan Steel Mills,
Pakistani media reported that investors from China, Russia and Korea are taking interest in the revival of Pakistan Steel Mills, which is closed since 2015. Pakistan’s Federal Minister for Privatisation Mohammed Mian Soomro informed a meeting that detailed meetings are being held with potential investors regarding the revival of Pakistan Steel Mills. The Minister was also told that the land valuation of PSM will be completed by the end of January and that Expression of Interest regarding PSM will be sought in March this year.
PSM was closed down in 2015. The loans and liabilities had increased to PKR 230 billion and losses to PKR 200 billion. The federal government has to pay PKR 750 million for salaries and pensions of the PSM employees. The federal government had paid PKR 35 billion on salaries of the closed PSM. The government had already decided to sack all employees of the PSM. In the first place, out of the total PSM’s workforce, 4544 employees have been laid off by PSM management by releasing PKR 11.012 billion. The successive governments have continued to pay the salaries and retirement benefits of the non-productive workforce of the Mill. Pakistan government has recently announced to run PSM through Public-Private Partnership to revive the Mill.
In 2006, Prime Minister Shaukat Aziz decided to integrate the steel mills under the intensified programme, called the Privatization Programme. The consortium involving Saudi Arabia based Al Tuwairqi Group of Companies submitted a winning bid of USD 362 million for a 75% stake in Pakistan Steel Mills at an open auction held in Islamabad. The consortium including the Magnitogorsk Iron and Steel Works of Russia, the al-Tuwairqi Group of Companies of Saudi Arabia and the Arif Habib Securities of Pakistan paid a total PKR 21.6 billion (USD 362 million) to take control. The entire privatization programme of prime minister Shaukat Aziz came to halt when WATAN PARTY filed a petition in the Supreme Court against the privatization citing irregularities in the process which was accepted by the Chief Justice of Pakistan Justice Iftikhar Chaudry. The Supreme Court on 8 August 2006 held that the entire disinvestment process of the Pakistan Steel Mills reflected haste, ignoring profitability aspect and assets of the mills by the financial adviser before its evaluation. On 23 June, a nine-member bench of the Supreme Court had annulled the sale. It had declared the USD 362 million transactions as null and void. In 2011, the steel mill was put under the management of government-ownership
Headquartered in Karachi in Sindh, PSM is reported to have name plate capacity of about1.1 million tonnes. It was built with extensive contributions from the Soviet Union in the 1970s. PSM is spread out over an area of 7,550 hectares including 4,205 hectares for the main plant, 3,266 hectares for the township and 81 hectares for the 110 MG water reservoir. In addition it has leasehold rights over an area of 3,043 hectares for the quarries of limestone and dolomite in the Makli and Jhimpir areas of Thatta district.