Pakistan Steel Mill cannot be privatised

Caretaker Minister for Privatisation Fawad Hasan Fawad said on Tuesday that Pakistan’s steel mill is very major asset for the country it can not be privatised.

During a press conference with Caretaker Information Minister Murtaza Solangi, Fawad Hasan Fawad declared Pakistan Steel Mills (PSM) as a nonviable asset that cannot be privatised.

He mentioned, that the amount of Rs2,542 billion was allocated to state-owned entities between 2018 and 2019, and in 2020, these institutions incurred financial losses that were equivalent to 7% of the GDP. Regrettably, the financial troubles plaguing state-owned entities have only intensified.”

Fawad Hasan Fawad continued, “The outstanding debts on 15 major state-owned entities, including Pakistan International Airlines (PIA) and PSM, amount to a staggering Rs2,065 billion. PIA has suffered losses exceeding $7 billion since 2012. With these funds, we could have built 10 universities, the Bhasha Dam, or even an entire ML-1 railway track.”

Fawad Hasan Fawad provided further insight into the dire financial situation of Pakistan International Airlines (PIA), stating that the airline’s cumulative losses had reached Rs713 billion by the close of June 2023. Additionally, PIA held a government-guaranteed loan amounting to Rs263 billion, and the caretaker government had also allocated Rs20 billion in funds to support the national airline.

Fawad highlighted the concerning fact that PIA was incurring daily losses of Rs500 million, translating to monthly losses of Rs12.77 billion. He further disclosed that state-owned entities had received subsidies amounting to Rs1,125 billion over the past four years.

Regarding the PIA’s fleet, he explained, “Out of the 34 PIA planes, 15 are currently grounded, and the monthly cost of operating six leased aircraft stands at $2 million.” In addition, the government had issued bonds valued at Rs779 billion for various state entities.

Fawad Hasan Fawad emphasized that the losses incurred by power distribution companies (DISCOs) had reached Rs600 billion, prompting the government’s desire to transfer administrative control to the private sector.

The caretaker minister proposed the establishment of an export processing zone as a more viable option instead of retaining the unprofitable PSM, which had accumulated losses exceeding Rs206 billion. He suggested that through the processing zone, Pakistan could potentially boost its exports from $20 billion to $25 billion.

The privatisation minister also noted that the government had received only one bid during the PSM auction, stating that PSM could not be sold based on a single bid alone.

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