Govt to sell shut Pakistan Steel Mills next year: Soomro

The government is planning to sell Pakistan Steel Mills, which has been shut since 2015, early next year after receiving encouraging response from Chinese and Russian companies, a member of Prime Minister Imran Khan’s cabinet said on Friday. The sale process has been revived after the government carved out the core business into a separate subsidiary which has no loans, employees and substantial liabilities, Minister for Privatisation Muhammad Mian Soomro said in an interview with Bloomberg. Differences between the federal and provincial governments, a major stumbling block in the past, have also been resolved. The land will be given in a lease as part of the transaction. Also read: Performance agreements — a new paradigm The Pakistan Tehreek-e-Insaf (PTI) government is looking to sell closed and loss-making units that will help curb losses and raise revenue aimed at reviving a $6 billion loan programme with the International Monetary Fund (IMF). The steel mill is among the largest loss-making units that costs $100 million a year. The final two years of the PTI government’s five-year tenure “are going to be very active” for privatisation, Soomro said. “Privatisation is important, thing is to keep losses low and bring in good management.” The biggest transaction will be the sale of two LNG-fired power plants that generate about 1,230 megawatts each and valued at about $2 billion before the Covid-19 pandemic. The sale of the plants that are among the most efficient plants globally will be completed in the current fiscal year, said Zafar Sobani, a board member at the privatisation commission. Also read: Roadshow organised to revive PSM “It also plans to sell power distribution companies, two state-owned specialised banks and heavy electrical complex. The privatisation drive has seen the sale of a hotel in August that was the nation’s fourth attempt,” Soomro said. The steel mill is the only fully integrated steel complex in Pakistan that accounts for a fifth of the nation’s production capacity. Its production capacity can be tripled to three million tonnes a year, according to Sobani. The steel complex near the port in Karachi will need investment but it is still viable since there is a shortage of steel that’s imported into Pakistan, said Soomro, a career banker who has worked at Bank of America Corp. He led the roadshow for the steel mill that concluded last month.

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