ISLAMABAD, June 8: A Supreme Court judge on Thursday observed that the agreement between the government and the three-party consortium on the sale of the Pakistan Steel Mills seemed to have been made in a “very cursory and casual manner”.

“Undertakings are never ambiguous, secret or hidden. But this agreement seems to be such,” said Justice Javed Iqbal, a member of the bench hearing petitions challenging the sale of PSM. Petitioners believe that the steel mills has been sold for a ‘paltry sum’ of Rs21.68 million.

PSM’s counsel Wasim Sajjad said there was complete understanding between the government and the bidders that 4,457 acres of the land housing the steel mills could never be sold for any other purpose.

When he tried to justify that in no way the government intended to mutate the land in buyer’s name, Justice Tassadduq Jillani mentioned that the agreement was silent about this condition.

Referring to some section of the agreement, the counsel suggested the bench ask for an undertaking from bidders that the land would not be used for any purpose other than running the mills.

He said the crux of the matter was that the steel mills was a viable project but it needed immediate investment to keep it running.

“You should concede frankly that there is no categorical understanding in the agreement,” Justice Iqbal said.

Chief Justice Iftikhar Mohammad Chaudhry, leading the nine-member bench, also observed that the most important component of PSM’s equity — its goodwill and the worth of the land — had never been considered during evaluation; its historical value had been assessed instead of the market value.

The CJ explained that the historical value of any project always depreciated with the passage of time even though the project was there, functioning properly and making profits. He said evaluators had relied on unauthenticated financial statements, supplied to them by the steel mills.

Justice Iqbal said it seemed that no regulatory framework had been worked out as the fate of 2,200 daily wage-earners and the contingent staff had never been considered. He said he would like to know if the privatisation would open the doors of unemployment.

But, Mr Sajjad said, PSM’s privatisation was part of the socio-economic policy of the government.

“What policy when people have to wait in queue to buy pulses?” the judge observed.

Mr Sajjad submitted documents about a private steels mills being installed by the Tuwairqi Group, part of the consortium, on 220 acres of land between sea water intake and disposal channels belonging to PSM to produce one million tons of steel per year.

The ground-breaking of the project was performed on March 30, 2006. A 60-year lease agreement was signed in May 28, 2004 for Rs245 per square yard at the time of acquiring the land and Rs250 per square yard as annual rent.

The bench noted that despite its directions the classified letters of PSM chairman to President Pervez Musharraf, in which it is believed that the PSM’s privatisation has been opposed, had not been provided to the court.

Mr Sajjad said the chairman was suffering from heart ailment and was in Karachi. He assured the court that the letters could be produced in chambers for judges’ perusal.