Pakistan Steel Mills Lease Plan News
ISLAMABAD: Privatisation Commission has approved a 30-year lease structure
for loss-making Pakistan Steel Mills under which at least 7,500 of the 12,500
employees would be laid off, its head said.
Built by the Soviet Union in 1970s, the state-owned facility (PSM) has become a
huge drain on government resources and has not produced steel at its 19,000-acre
facility since June 2015.
That was when the national gas company cut its power supplies, demanding payment
of bills of over $340 million.
PSM has accumulated losses of over Rs163 billion ($1.56 billion) and other outstanding debts.
Privatisation Commission Chairman Mohammad Zubair has said a 30-year lease plan
had now been approved, with Chinese and Iranian companies showing “interest”
in taking over the vast factory on the outskirts of Karachi.
“Now the next step is cabinet approval of the lease structure, which we are certain
of getting, after which we will seek expression of interest and move towards bidding,”
Zubair said. “The whole process will take about four or five months.”
Zubair said about 5,000 employees would be retained by the new investor while
the remaining 7,500 would receive an “attractive separation package.”
Last year, protests against the sale of loss-making Pakistan International Airlines (PIA) and a plan to lay off its surplus employees turned violent, killing at least two protesters and injuring dozens.
Pakistan promised the International Monetary Fund that it would privatise PSM and PIA as part of the $6.7 billion national bailout loan agreed in 2013.