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Government seeking private investment in Pakistan Steel Mills

SAMAA | - Posted: Jun 4, 2020 | Last Updated: 4 weeks ago
Posted: Jun 4, 2020 | Last Updated: 4 weeks ago
Government seeking private investment in Pakistan Steel Mills

Photo: AFP

The federal government is seeking investment from the private sector in the Pakistan Steel Mills after deciding to lay off all its employees.

Minister for Industries and Production Hammad Azhar said on Thursday that the government is looking to restructure the debts and hand over core operations of the Mill to private investors to help revive it.

The machinery and equipment installed on 1,800 acres will be privatised, while the 18,000 acres will remain the government’s property. Fifteen parties have reached out to the government so far.

A Rs20 billion package has been prepared for the employees and each of them will be given at least Rs2.3 million as golden handshake. There are 9,350 employees who will be fired within a month and another 250 will be let go within three months.

Though the Mills have been closed for years, they are running a Rs550 billion deficit and billions are being spent on debt servicing.

Azhar said some employees will be paid more that if they were employed for a longer period of time. “A few will even get Rs70 or Rs80 million, depending on their employment period.”

The government had been spending Rs700 million monthly to pay the Mills’ employees’ salaries and a total of Rs35 billion has been spent since 2015, when the PML-N was in power.

Azhar said the government was changing its role from being owner and operator to owner-and-policy maker and the Mills are a “white elephant” that the country needs to get rid of, especially at a time when the country’s economic situation is worsening.

The minister saidthat privatising the sugar industry had already shown the pros of the move. “Now we want to fix the public sector and the Pakistan Steel Mills,” he said.

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