Privatisation of Steel Mills okayed

[Edevelop]

Govt to disinvest 51pc shares of PSM, 20pc of OGDCL | Shares of HBL, UBL, ABL also to be offloaded | Process to generate over Rs150b

ISLAMABAD - IMRAN ALI KUNDI/MONITORING DESK - The board of directors of Privatisation Commission on Thursday approved to disinvest the shares of more public sector entities including Pakistan Steel Mills (PSM) and Oil and Gas Development Company Limited (OGDCL) which would generate more than Rs 150 billion revenue for the government.
The second session of the Board of Privatisation Commission was held with Chairman/Minister of State for Privatisation Commission Mohammad Zubair in chair. Apart from PSM, OGDCL, the board of directors also approved to disinvest the shares of Habib Bank Limited, United Bank Limited, Allied Bank Limited and Pakistan Petroleum Limited.
According to BBC, the board, among other matters, approved disinvestment of 51 percent shares of Pakistan Steel Mills in the capital market.
The Board also allowed the Commission to initiate process for hiring of Financial Advisers for the above mentioned entities and constituted transactions committees (TCs). Mohammad Zubair informed the board that government would ensure transparency in the process of privatisation. All stakeholders would be taken into confidence. The chairman also highlighted that government was sensitive to the employees’ reservations and their rights would be protected.
Sources informed that government had shares in Habib Bank Limited, United Bank Limited and Allied Bank Limited, which would be disinvested in the capital market. The government is expecting to generate over Rs 150 billion revenue from the capital market transactions. The authorities are estimating a minimum Rs80 billion gains from 10 percent sale of OGDCL shares, Rs20 billion by offloading 5 percent shares of Pakistan Petroleum Limited, Rs15 billion from 10 percent shares of Untied Bank Limited, Rs50 billion by offloading 20 percent shares of Habib Bank Limited and Rs10 billion by offloading 10 percent shares of Allied Bank Limited.
It is worth mentioning here that government has initiated the process of privatisation of 31 public sector entities as committed with international monetary fund for loan programme worth $6.64 billion. The board of directors of the privatisation commission on the first day (Wednesday) had approved the disinvestment of 26 percent shares of Pakistan International Airlines (PIA) and sale of heavy electrical complex (HEC) and sale of National Power Construction Company (NPCC).
The board members including Arsala Khan Hoti, Nasiruddin Ahmad, Zafar Iqbal Sobani and Secretary Privatisation Commission attended the second day meeting. According to BBC, the board also decided to offload 51 percent shares of Islamabad and Faisalabad electric supply companies. It merits mentioning here that then government in 2006 had started the process to privatise PSM and a consortium of Russian, Saudi and Pakistani private companies had got its 75 percent shares by giving highest bid of Rs 21.67 billion. However at that time, Supreme Court of Pakistan had declared the sell-off of PSM illegal and thus the process could not be completed.
Established with the technical and monetary support of Russia, the PSM has been one of the major projects of Pakistan. However, for the last few years, the entity was going in deficit. The previous government, to save it from bankruptcy, had also given a bailout package to the PSM.
On Wednesday, the board of directors approved privatisation of three public-sector entities, including disinvesting 26 percent shares of Pakistan International Airlines (PIA), to a strategic investor and initiation of the process for hiring of financial advisers in this regard. Chairman/Minister of State for Privatisation Commission Muhammad Zubair chaired the first meeting of the board. The board also approved privatisation of two other entities, National Power Construction Company (NPCC) and Heavy Electrical Complex. “The Privatisation Commission’s board has directed initiation of the process of both the entities, NPCC and HEC,” said an official statement.

Privatisation of Steel Mills okayed

 

[Jazzbot]

Welcome to olx.nooraleague.pk

 

[Bhai Zakir]

Can Indian govt. or Indian companies acquire them??

 

[I M Sikander]

Can Indian govt. or Indian companies acquire them??

No chance, Indian companies or JV will definitely be scrutinized during pre-qualification of firms.

Welcome to olx.nooraleague.pk

typical response from PTIAN.
KPK govt. should also participate in the bid and take control of PS just like PESCO .

 

[Jazzbot]

typical response from PTIAN.
KPK govt. should also participate in the bid and take control of PS just like PESCO .

Yes, typical PTIAN response: What you'll have to say about Government decides to end cheap railway facility | Pakistan Defence ?? They have looted this country so many times that I won't ever trust these goons regardless of my personal choice of political party.

 

[Bhai Zakir]

No chance, Indian companies or JV will definitely be scrutinized during pre-qualification of firms.

One can't stop Indians if they really wants it for example laxmi mittal's steel company is world's largest steel company and that's a foreign company not an India and its headquarter is outside India too OR one can register a company in Dubai and move into pak to acquire the companies.

My question is why stop Indian companies when they work in same set of environment and working conditions. It will benefit both of us.

Ya phir bandaro ki ladai main, billi ka fayda hoga.

 

[CrazyPaki]

instead of fixing the management they are busy selling it off to others, which ever the case lets hope for the best

 

[Crypto]

Shares will probably be bought by someone in the sharif family or a distant relative who will then GIFT it back to sharif sab

 

[niaz]

Fact of the matter is that it is not gov’t job to run any industry. Least of all one that employs more than 16,000 staff!

It is not that there should be no industry in the public sector. However such industries should be fully autonomous bodies free from gov’t interference. Gov’t representation only thru board of directors which should also include Executive Directors with technical qualifications.

This has not been the case with the Steel Mill and it is now a white elephant. Can you believe that Pakistan Mill has capacity to produce 1.1-million tons of steel (produced 979,00 tons in 2006) is currently running at a mere 3% capacity and has no money to buy raw materials!

Waiting for rescue: Pakistan Steel Mills needs huge money injection to stay afloat – The Express Tribune

In 2006, PSM was valued at Rs22 billion (about $350-million in 2006) in the approved bid of privatisation, which was overturned by the Supreme Court bench headed by the infamous CJ Iftikhar Chaudhry citing ‘omissions and commissions.’ Since that decision, fresh liabilities of Rs100 billion have been created, which significantly reduce bidders’ appetite.

Recently, the Ministry of Industries and Production in a report presented before the Economic Coordination Committee (ECC) said PSM has borne a massive loss of Rs 86.27 billion during the rule of the previous government. The report said four bailout packages worth Rs 40.507 billion were offered to the state-owned mill from 2009 to 2012, but despite that its losses piled up to Rs 86.27 billion by June 30, 2013 and liabilities rose to Rs 98.57 billion, resulting in a negative equity position.

I ask all those who claimed that we were selling the national assets now to come out and tell us is it an asset or a liability?

Pakistan Steel privatisation looks even more difficult than last attempt – The Express Tribune

Frankly no one is going to buy it in this condition? If anyone does, he will surely close down the mill; divide the land sell the plots off for building houses. Economic reality demands that either it should be revamped with immediate effect or closed down. Because longer you keep it running, more the pain at its final demise.

 

[Armstrong]

The Socialist in me doesn't like these Privatizations !

 

[Bilal.]

The Socialist in me doesn't like these Privatizations !

Privatisation is the way to go, we need a strong and vibrant private sector to take our economy forward. Nationalisation destroyed our economy. But we need to make sure that the strategic assets like PSM remain in the hands of Pakistanis or consortium of Pakistanis.

 

[Armstrong]

Privatisation is the way to go, we need a strong and vibrant private sector to take our economy forward. Nationalisation destroyed our economy. But we need to make sure that the strategic assets like PSM remain in the hands of Pakistanis or consortium of Pakistanis.

I don't favor Nationalization but I do favor Public Enterprises being managed by a Board of Trustees who are independent of the Government but at the same time haven't Profit Maximization but Social Benefit as their Core Mission !

At the same time I'd favor an Employee Cooperative too as opposed to such Corporate Behemoths being owned by a group of halves who grow rich in perpetuity !

 

[Pinnacle]

Welcome to olx.nooraleague.pk

Sir, Steel Mills and PIA are white elephants to our economy they need to be sold out otherwise they will eat up your left over economy...

Privatization is okay if national firms are invited to buy the shares.

 

[CrazyPaki]

i think its not about the selling of state enterprise its about the process and who its going to be sold to.

 

[Bilal.]

I don't favor Nationalization but I do favor Public Enterprises being managed by a Board of Trustees who are independent of the Government but at the same time haven't Profit Maximization but Social Benefit as their Core Mission !

At the same time I'd favor an Employee Cooperative too as opposed to such Corporate Behemoths being owned by a group of halves who grow rich in perpetuity !

We all know what will happen to the board of trustees in our country, it will be full of political appointees. I am all for welfare but I am appalled by the misplaced sense of entitlement the employees of these corporations have, they feel they are entitled to the job without merit, they are entitled to be kept on payroll without working enough to justify their position and that they are entitled to loot and plunder all the while the corporations are kept alive on life support of hundreds of billions of rupees each year. I always say entitlement breeds incompetence, this misplaced sense of entitlement has to go.