Pakistan’s Industry Minister Hammad Azhar Wednesday dismissed rumors about the privatization of Pakistan Steel Mills (PSM) and revealed that government plans to set up a public-private joint venture to run the company and bidding for the JV is scheduled for later this year.
The minister announced his decision in a conference held with the Senate’s Standing Committee on Industries and Production. He clarified that PSM has not been privatized but the plant seeks to cooperate with private investors in a joint venture.
Twelve companies expressed interest in the mill, of which six have visited the steel plant. Combining the assets and operations of the plant with a private entity could be beneficial for the mill.
In 2008, PSM receiving a PKR10bn ($59.7bn) funding for the government but a drop in global steel prices drastically impacted the company’s sales. In 2010, it’s financial status further weakened when 4,500 employees were made permanent even as the company’s sales dropped to 6pc from 40pc. Beside a large workforce, the mill’s inefficiencies led to its downfall.
Among the suggestions to revival PSM include appointment of a Chief Executive Officer, sale of land assets to repay debt and better workforce management.