Presided over by Senator Ahmed Khan, the committee also decided to include Senator Nauman Wazir Khattak and Senator, Lt-General Abdul Qayyum (retired) who understands steel business as special invitee so that a comprehensive report may be prepared for the ECC. Chairman Standing Committee argued that it is the Prime Minister who has to take the decision about the future of PSM, hoping that he would run it. The committee decided to visit PSM on March 14 or 15 for this purpose.
"We will physically visit the Mills as things on papers are different from what is on ground," Senator Ahmad Khan added.
Secretary Industries and Production, Azher Ali Choudhry and Additional Secretary, Abdul Jabbar Shaheen briefed the committee about the PSM's affairs and current status.
Secretary Industries stated that PSM's losses have reached Rs 212 billion. The mill has been de-listed from the entities to be privatized. He stated that several options are available with respect to PSM, one of which is to run the mills again. In addition, PSM's privatization is still an option. Russian and Chinese companies are interested in buying PSM.
Azher Ali Choudhry further stated that National Accountability Bureau (NAB) has closed inquiry on shutting Steel Mills due to gas suspension. The committee members including its Chairman expressed concern over the closure of this national asset for the last four years yet financial losses of Rs 400 million per month (about Rs 5 billion per annum) continue.
Senator Aurangzeh Khan said that PSM is closed since 2015, proposing that the committee should now take action so that it could restart operations.
The committee inquired as to what expenditure would be incurred if it is operated at 40 per or 50 per cent Capacity Utilization (CAPU). Arif Shaikh, acting Chief Financial Officer (CFO), informed the committee that if the Mills operate at 80 percent CAPU, then it would be in profit, adding that at 50 per cent CAPU. This unit's operations are not feasible. He said, the land owned by PSM is around 18000 acres and current strength of employees is 10,000. Monthly expenditure on employees is Rs 380 million.
Standing Committee directed CFO to prepare mills feasibility. Secretary Industries and Production asked CFO to calculate its IRR (Internal Rate of Return).
Some of the members argued that it is unfair and the Mills should be given to a private party which would begin operations in just one month's time.
Additional Secretary MoI&P, Abdul Jabbar Shaheen, said that PSM was in profit till 2008 but subsequently it suffered a loss of Rs 25 billion which rose to Rs 35 billion, and has not been in profit since. He said 10 cases of PSM are still in NAB.
The standing committee also constituted a sub-committee headed by Senator Muhammad Ali Khan Saif, after committee members raised concern on the price of plots in Special Economic Zones (SEZs).
The Board of Investment (BoI) would give a detailed briefing to the committee about SEZs in the light of the SEZs Act prior to preparing recommendations for main committee. Senator Sitara Ayaz maintained that Chinese investors also have issues in the SEZs.
Chairman Standing Committee stated that the benefits of SEZs are not trickling down to small investors. He further stated that land is being procured too expensively. The representative of Ministry of Planning, Development and Reforms also endorsed the viewpoint of Chairman Standing Committee but clarified that the location and price are the responsibility of provincial governments.
