Chinese and Russian companies have entered the race for investment in Pakistan Steel Mills (PSM) in order to run it on the public-private partnership mode
Chinese and Russian companies have entered the race for investment in Pakistan Steel Mills (PSM) in order to run it on the public-private partnership mode.
Briefing the Senate Committee on Industries and Production, Federal Minister for Industries Hammad Azhar ruled out the privatisation of PSM and vowed to operate it as a joint venture by holding open bidding at the end of the current year. He said the industries ministry had been in contact with 12 international companies to make the steel mill operational and representatives of six companies had so far visited the mill.
Out of those six companies, three were keen to purchase the steel mill, he said, adding that the companies were from China and Russia.
The steel mill could only be bought by an international company since local investors lacked the capability to do so.
“An investment of over $1 billion is required to run the mill,” Azhar told the Senate body. “If organisations like PSM are to be kept under government control, then we have to make some big decisions, and the PTI government has decided to run the mill in collaboration with private enterprises,” he added.
The minister revealed that some portion of the land owned by PSM would be given on lease. He pointed out that services of about 4,000 employees of PSM were regularised in 2010 but it turned into a loss-making mill. He stressed that the Supreme Court had already sought a plan regarding the mill.
“We will not leave Pakistan Steel Mills’ employees helpless,” he emphasised, noting that cases of approximately 500-600 employees were currently being heard in courts.
The minister stated that Pakistan’s total steel consumption was seven million tons, which was entirely produced by the country. Pakistan currently imports all raw materials for making steel products, he added. He pointed out that public institutions’ payables amounted to Rs1.5-2 trillion, which exceeded the country’s annual defence budget.