‘Pakistan Steel Mill cannot be privatised’

Caretaker Minister for Privatisation Fawad Hasan Fawad said Tuesday that the Pakistan Steel Mills (PSM) is a dead horse which cannot be privatised, ARY News reported.

While addressing a press conference alongside Caretaker Information Minister Murtaza Solangi, Fawad Hasan Fawad said that Pakistan Steel Mills (PSM) is a dead asset which cannot be privatised.

“The amount of Rs2,542 billion was spent on the state-owned entities from 2018 to 2019, whereas, the financial losses to the institutions in 2020 were equivalent to 7% of GDP. The financial losses of the state-owned entities have further increased now.”

“The value of debts on 15 major state-owned entities including Pakistan International Airlines (PIA) and PSM is Rs2,065 billion. PIA suffered losses of more than $7 billion since 2012. We could have constructed 10 universities, Bhasha Dam or a complete track of ML-1 from these funds.”

Related: Cabinet approves Rs620 m for PSM employees salaries

“The overall losses of the PIA have reached Rs713 billion by the end of June 2023. Additionally, the airline has a government’s guarantee-based loan worth Rs263 billion. The caretaker government has also disbursed Rs20 billion funds for the national airline.”

Fawad further detailed that the national flag carrier is suffering a loss of Rs500 million on a daily basis and Rs12.77 billion on a monthly basis. He added that subsidies worth Rs1,125 billion were granted to the state-owned entities during the past four years.

“15 out of 34 PIA planes were grounded and the monthly expense of six leased aircraft is $2 million. The government issued bonds worth Rs779 billion for different state entities.”

Fawad Hasan Fawad said that the losses of the power distribution companies (DISCOs) have reached Rs600 billion and the government wanted to hand over the administrative control to the private sector.

The caretaker minister suggested to establish an export processing zone instead of retaining the PSM whose losses are more than Rs206 billion. Pakistan could increase its exports from $20 to $25 billion through the processing zone.

The privatisation minister said that the government received only one bid during PSM auction. He added that PSM cannot be sold on a single bid.