ISLAMABAD: Minister for Finance Asad Umar has said that the government has no plan to privatize the State Owned Institutions (SOEs) having strategic importance such as Pakistan Steels Mills (PSM)
Pakistan International Airlines (PIA), and Pakistan Railways, however the government would privatize the institutions with no strategic value.
“Pakistan Steels Mills is one to those projects which possess immense strategic value for the state as keeping in view the background of presence of huge iron ore, and coal reserves in the country, it can become a base for industrialization,” he said.
He said the government has given the management of PSM 45 days to come up with a comprehensive plan of running the mill at its full capacity so that it could become a profitable project.
“The past two governments had conducted feasibility study o the project, one conducted from Russia and the other from China and the both countries said the project was quite feasible and it could run with profit.
“During early days of the Pakistan Muslim League-N government, China conducted the feasibility study of Steel Mills and said that if the government poured into the project an investment of Rs 80 billion, the mill could achieve the capacity of 1.3 million ton steel per year, and at that time the mill was running on the capacity of only 0.15 million and later on the mill was totally closed down,” he said while talking to a news channel.
He said had “Being on opposition benches, we repeatedly asked the PNL-N government to implement the Chinese advise of investing Rs 80 billion, but the government paid no heed to us which resulted in further bleeding of the institutions and it had to pay even more than Rs 80 billion in term of subsidy for PSM employees’ salaries”.
To a question, Asad Umar said during Pervaiz Musharraf tenure, the PSM was giving running on profit with production capacity of 85 percent and erased all the previous deficit of PSM and then he planned to privatize it years and then they tried to privatize the PSM.
The minister said the Washington formula of no state intervention in the business of the country was not implemented by any developing country.
“No one can give the example of any developing country who has implemented this formula during last 50 years across the world. China, Singapore, Saudi Arabia, Malaysia, Qatar, UAE, and India, all have very large commercial State Owned Entities,” he added.
He said despite having huge representatives in the parliament, the PML-N government could not divest the SOES except only one small entity, but it paid no attention on the bleeding entities which kept on posing further losses to the government.
With regard to PIA, the finance minister said that recently the government had approved a bailout package of Rs 23 billion to carry on the business of the airline but said “this is not the solution and is
only a bandage; it needs much more money to keep it on track”.
“But now I have told them categorically that next time I will give the money only after fulfilling two conditions, first there should be such a visible leadership about which we can trust that it can deliver, and second that a comprehensive plan with a set direction to turn around the fate of airlines.”
He said the new PIA head had been given a task of preparing a comprehensive plan to make PIA commercially viable and profitable, and for this the government has given two-months’ time.