May 16, 2006	Tuesday	Rabi-us-Sani 17, 1427

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LAHORE, May 15: The Wattan Party has moved the Supreme Court in a constitutional petition with a request that the sale of the Pakistan Steel Mills (PSM) should be cancelled in the larger national interest because the deal with a multinational consortium in this regard is not transparent.

Moved in the apex court’s original jurisdiction through barrister Zafarullah Khan, the petition submitted that the Privatisation Commission sold the mills to a Russian and Saudi consortium for Rs21.68 billion after declaring them the highest bidders. But, according to the petition, employees of the same mills had made an offer of Rs24 billion.

The petitioner submitted that the PSM was constructed on about 4,500 acres on which 110kms of roads, 70kms of railway track, a 165MW power plant, a water treatment plant and a jetty for cargo ships were built. It submitted the price of land alone valued about Rs13.5 billion at a rate of Rs3million per acre in the open market.

He submitted the federal government was left with a liability in the name of the PSM to a tune of Rs7.5 billion on account of bank loans in addition to Rs700 million as annual mark-up. The loan was payable by 2013 and the mark-up amount was estimated to add to the liabilities by another Rs5 billion. Besides, the government was obliged to pay Rs15.75 billion to the mills employees under the voluntary separation scheme.

According to the petition, the PSM, established in 1968, started a full-scale operation in 1981 and reached its optimum level of producing 1.1 million tons of steel. The mills had been earning a profit of about Rs6.7 billion a year for 15 years and was not a sick industry which could be sold out.

The petition stated that the PSM was the only steel mills after the destruction of the Pakistan Engineering Company in the public sector and the Ittefaq Foundries in the private sector, which was a strategic industrial investment. After its disposal at a throwaway price, the country was left with no such a heavy industry which had a huge potential for national development.

The petition stated that the Privatisation Commission had neither made public the mills’ reserved price nor got its valuation done. The commission, it stated, also failed in making public the names of parties interested in the deal. It also cited a government statement that it was expecting about $700 to $1,000 million in the proceeds.

Praying for the cancellation of the deal, the petition submitted that the state must retain strategic assets and other sector to have a control over the national economy. It stated the government had already compromised on strategic national assets like the PTCL which was a major blow to the economy because its sale had ended the country’s control over the vital sector of communication.

Citing Section 16(2)(a) of the Privatisation Commission Ordinance, 2000, the petitioner stated the law provided for 10 per cent of the proceeds in all transactions was to be utilised for poverty alleviation. But the government had said all the proceeds from the sale of the PSM would be used for debt retirement which was unlawful.