An auction for strategic sale of Pakistan Steel Mill (PSM) is likely to be held in May 2020, according to the local media. PSM which is defunct for a decade had an annual steel production capacity of 1.1mn mt and multiple iron foundries.
This upcoming auction has also garnered the interest of renowned steelmakers from Japan, Thailand, Korea and Malaysia, who might invest in the plant, according to the local media.
The sale of PSM is a part of Pakistan Government’s privatisation plan for loss-making Public-Sector Entities (PSE). Though discussions for privatisation began a decade ago, a separate strategic cell for privatisation was formed only recently.
Presently as a part of the process, an economic coordination committee has allocated PKR350mn towards partial settlement of PSM’s liability towards Sui-Southern Gas Company.
Privatisation of these PSE’s is likely to conclude by the end of 2020. The government estimates to earn PKR150bn ($960mn) from non-tax revenue through the process before the announcement of its annual budget on June 30, 2020. In the next phase of the privatisation, ten more PSE’s will be up for sale.
Pakistan’s domestic steel demand is expected to improve in the near term. Steel demand was weak for over six months, amid lack of government support for the revival of the steel industry and lack of infrastructure projects in the pipeline.
A steelmaker in Karachi told Davis Index, discussions and proposals for privatisation were floated for several years, however, its implementation failed.