ISLAMABAD: The federal government has sent the financial documents of Pakistan Steel Mills (PSM) to Sindh government whereas State Minister for Privatisation Muhammad Zubair says the government has no plans for issuing any bailout package for PSM unless there is any improvement in the gas supply.
Talking to The News, Muhammad Zubair said Sindh government had sent a letter and requested for few things about the privatisation of Pakistan Steel Mills. The government has sent them the financial statements and other relevant documents and after studying them the provincial government would contact the federal government.
He said the authorities concerned in Sindh government visited PSM unit on Monday and hopefully after studying the statements and consultations they would soon contact the federal government.
Talking about any further bailout package for PSM, Zubair said the government is not considering any such option until there is any improvement in gas supply. He said the PSM management had sent them a proposal for bailout package but the federal government has rejected it.
Earlier the minister had informed that government has finalized the transaction structure for the privatization of PSM, which soon would be presented before the Council of Common Interests (CCI) for its approval.
According to the State Minister, any further delay in taking a decision on privatisation of this public sector enterprise would cost the national kitty heavily. The federal government has formally asked the provincial government if they are interested in buying the PSM, Zubair said.
The government appointed a professional Board of Directors (BoD) and initially it showed some improvement as at one stage the production of PSM reached 60 percent of its capacity. However, once the supply of natural gas was reduced, it started affecting the production and with the current liabilities and payable debts, it is very difficult to revive this sick unit.
“We have to decide what can be done but the government would have to own up the liabilities or any further delay in privatisation would increase the liabilities,” commented Zubair.
It is pertinent to mention here that with the passage of every day the liabilities and payable debts of PSM are increasing. As per detailed audited accounts, PSM’s net losses during 2008-09, 2009-10, 2010-11, 2011-12, 2012-13 & 2013-14 were respectively Rs26,526 million, Rs11,566 million, Rs12,434 million, Rs22,273 million, Rs28,648 million & Rs25,836 million respectively.
In 2014-15 (unaudited), the loss was Rs24,619 million and its was Rs8,610 million from July 2015 to October 2015. The total losses thus add up to Rs160,512 million plus Rs159,000 million on account of liabilities till June 2015, making it a total of Rs319,512 million.
Total financial impact to PSM accounts was Rs365,512 million from July 2008 to December 2015. When referred about the current losses and liabilities of PSM, Zubair commented that the government is well aware of the financial conditions and this is the reason they have decided to privatise the unit.