Pakistan has decided to privatise its PSU Pakistan Steel Mills (PSM). Close to 15 companies have expressed interest in acquiring the assets of PSM. The plant had halted production in 2015. Earlier there were plans to offer PSM exclusively to Chinese investors, which was scrapped in favour of open-auction.
The government of Pakistan has been losing close to PKR70mn ($428,673) per month in terms of payment of salaries and other dues of the mill. PSM has been in crisis for a decade and has debt of around Rs230bn. The government plan to terminate close to 9,100 employees on PSM’s payroll in two phases. Pakistan’s Economic Coordination Committee (ECC) approved the government proposal to fire all employees PSM on Wednesday. A severance package of PKR20bn for the employees was also approved.
Only core steelmaking operations of the PSM would be privatised, land under the ownership of the mill will remain in government lands. Close to 15 companies have expressed interest in acquiring the assets of PSM.
PSM has an annual nameplate capacity of 2.2mn mt and was to be expanded to 3mn mt. The mill had operated at a sub-optimal capacity of 1mn mt per year.