CCOP approves PSM’s restructuring plan

ISLAMABAD: Cabinet Committee on Privatisation (CCOP) approved a 30-year concession transaction structure proposed by the financial advisors for the restructuring of Pakistan Steel Mills (PSM), a privatisation minister said on Friday.

The proposed structure includes a tripartite concession agreement between the government, Pakistan Steel Mills Corporation (PSMC) and the investor for a period of 30 years on the basis of revenue sharing.

According to the structure plan, PSM’s land will remain with the government while the plant and machinery will be leased, invested and then transferred back to government for a maximum period of 30 years, while no asset of PSMC will be sold.

“It is the incumbent government which has come this far in the process for privatisation and transaction of proposed entities,” a government statement quoted Privatisation Minister Daniyal Aziz as saying. He was meeting with an Asian Development Bank’s (ADB) team led by Werner Liepach, director general for its Central West Asian Department.

In January, Privatisation Commission board gave a go-ahead to the proposed structure and the further approval from CCOP was awaited.

Aziz said the major task before leasing the mills is to settle the liabilities through viable plan and for that various meetings with Sui Southern Gas Company, National Bank of Pakistan had taken place with promising outcome.

“The purpose behind this exercise is to isolate the mills from these encumbrances and hand it to the third party on lease,” he added. “Each employee will be paid every penny in accordance with his preference.”

Privatisation minister said there are several challenges to get to the privatisation “but the cost to the poor citizens is in 100’s of billions if we don’t move forward”. “Those making tall claims about postponing should also provide the cost,” he added.

Aziz further said the privatisation of Pakistan International Airlines (PIA) would also be carried out according to the law and government would be holding management control along with 51 percent shares of the airline. “Prime Minister is positive about the plan and in recent CCOP and subsequent cabinet meeting the approval was granted to go ahead with the privatisation of PIA and PSM.”

Federal minister emphasised that the employees’ interests are top consideration when it comes to the privatisation and they would not be left in a lurch in case of the privatisation of PIA and PSM.

“Privatisation is in the best interest of the country which will bring economic progress by turning these loss making entities into profit making.” Liepach said ADB could extend financial and technical support to the government for the privatisation of PIA and PSM.