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PSM can be run under public-private partnership, moot told

Karachi

March 7, 2021

Noted economist Dr Kaiser Bengali has suggested running Pakistan Steel Mills (PSM) under a public-private partnership, saying that as the government wants to privatise it and workers are not able to take it over, the private sector with financial investment would make it possible to run it.

He was speaking at a consultation on the privatisation of public sector enterprises organised by the Pakistan Institute of Labour Education and Research (Piler) at the Arts Council of Pakistan on Saturday.

Dr Bengali pointed out that the main excuse for privatisation was given by the government that workers were responsible for the loss of public entities such as the PSM.

“It was the inefficiency of the management of the public sector enterprises that they failed to invest to improve performance,” he said. “It is a fact that there is more employment in the public entities, but the losses are not because of them.”

The PSM was set up to provide raw material to the engineering industries which were to be set up in the surrounding industrial areas like Dhabeji and Bin Qasim, where surplus workers could have been utilised, he said.

He emphasised the need to have an analysis of the PSM’s profit and loss account and balance sheet and see why it was in losses. “What are its fixed assets and when were they increased? The new buyers have to buy it with assets and liabilities. You need to have data, as when Habib Bank was privatised the government had to free it from liabilities.

“Through a public-private partnership, the management of the PSM will be handed over to the private sector,” he said. “I know many companies are interested in taking control of Pakistan Steel, but it needs to have a new investment.”

Former chief economist Dr Pervaiz Tahir said that during the Covid-19 pandemic, the government had removed thousands of workers from Pakistan and more were being rendered unemployed. Such a type of privatisation during a pandemic was harmful to society and the economy, he remarked.

“It seems the government does not have any intention to run the Pakistan Steel Mills, and we don’t have a successful example of running a factory by workers.”

He suggested a public-private-workers-participation model to run the PSM, in which workers should be involved. But for that purpose, the workers should consider this option if they would be able to run it or not.

Another leading economist Dr Asad Sayeed suggested providing social protection or an unemployment allowance to those workers who were laid off.

“In my view, the workers of public sector enterprises should be retrained and those who have lost jobs be provided retraining and skills. An interim system of social protection should be put in place, so the workers’ economic problems are solved.”

Dr Asad Sayeed said unemployment compensation and re-training should be initiated by the government.

He said that handing over the PSM to the provincial government of Sindh was not viable. “The Sindh government would not bear the heavy losses and the federal government makes policies on taxation.”

Senior lawyer Faisal Siddiqi underlined the need for strong mobilisation of workers against privatisation. In fact, he said the courts could not help trade unions much and it would take a lot of time in a legal battle. Siddiqi said the courts could not stop the government from doing privatisation.

Karamat Ali, Piler executive director, said the privatisation process would harm the entire economy and workers’ rights.

“We have to be united and fight against the anti-worker policies of the government,” he remarked.

Representatives of trade unions of Pakistan Steel and Wapda also attended the consultation.

Prominent among them were Habibuddin Junaidi, Mirza Masood Ahmed (Pakistan Steel Mills), All Pakistan Wapda Hydro Electric Workers Union representatives, including Azam Khan (provincial joint secretary), Muhammad Hanif Khan (central vice president), Siraj Beg, Hashim Ali, Shaukat Qaimkhani, Sajidullah Rajput and Ismail Khoso.