By Staff Reporter
ISLAMABAD: China’s BaoSteel is likely to fire up the long-cold blast furnaces of Pakistan Steel Mills Corporation (PSMC) as the Chinese steelmaker, which has recently completed a successful due diligence tour, is eyeing a deal, the country’s privatisation managers said on Friday.
Privatisation Commission (PC) officials revealed this during the inaugural meeting of the Cabinet Committee on Privatisation (CCoP), which was chaired by Federal Minister for Finance and Revenue Miftah Ismail.
Formerly, manufacturer of nearly half the country’s steel demand, the state-owned and erstwhile USSR-built PSM’s humongous structure now looks like the haunted ruins from the cold war era. Debt, mismanagement, political meddling, corruption, etc nearly slew the iron giant. The government wanted to sell this cash-bleeding dinosaur first, but later decided to revive it through private sector or foreign partnership.
Chairman Privatisation Commission (PC) presented before the meeting the government’s plans for the revival of PSMC.
The plan focuses on revival through significant foreign direct investment and technology transfer generating employment opportunities for qualified workers.
The committee was updated on a recent successful due diligence visit by a team of BaoSteel, world’s largest steel producer.
BaoSteel manufactures 180 million tonnes of steel per annum (mpta), one of the four interested parties with plans to increase the PSMC production capacity to 3 mtpa.
The CCoP unanimously welcomed the prospect of PSMC revival, entailing commercial leasing of 1229 acres of land and jetty, and directed Ministries of Industries & Production, Energy, and Maritime to work with PC to remove all bottlenecks expeditiously.
CCoP was also detailed about the ongoing efforts to recapitalise NPPMCL, the owner of two RLNG power plants in Balloki and Haveli Bahadur Shah.
Earlier, PC arranged bids of Rs102 billion from a local syndicate of banks for NPPMCL, which will release the government funding and is currently working actively with relevant ministries to fulfil conditions precedent necessary for financial close.
The CCoP decided to form a sub-committee composed of the Minister of Power, Chairman PC, Secretaries of Power, Petroleum and Privatisation, Additional Secretary Finance Division and CEO NPPMCL to speed up the process.
Moving on, Chairman PC tabled a summary on private sector participation in management of DISCOs.
The CCoP agreed that it was a critical area of focus and directed the PC to take one DISCO at a time to pursue a concessional arrangement focused on enhancing their financial viability and service quality.
Additionally, transfer of DISCOs to provinces was also considered.
The finance minister told the CCoP of foreign governments’ interest in investing in Pakistan.
The committee deliberated the modalities for negotiated Government to Government (G2G) commercial transactions and decided that it was not the domain of the Privatisation Commission.
It directed the Ministry of Finance to formulate the proposal for structured transactions in coordination with relevant ministries for consideration of the Cabinet.
In the end, the CCoP decided to reconvene and conduct further review of the privatisation programme, which was of high priority under the current economic situation.
The meeting was attended by Federal Minister for Privatization Abid Hussain Bhayo, Minister for Defence Khawaja Muhammad Asif, Minister of Interior Rana Sanaullah Khan, Shahid Khaqan Abbasi, Minister for Industries and Production Syed Murtaza Mahmud, Advisor to the PM on Establishment Ahad Cheema, Chairman Privatisation Commission Saleem Ahmad, Federal Secretaries, and senior officials of relevant ministries.
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