ANOTHER crisis point, another bailout. Pakistan Steel Mills is to receive Rs8.6bn of public money — in addition to Rs6bn received since December —   in yet another attempt to keep the ailing state-owned enterprise on its feet. Over the last few months the finance ministry has provided less money, slower, than it had promised. That is in part why the company racked up more than Rs20bn in losses in 2011-12 alone. But it is also a well-known story that cash injections simply serve to keep PSM afloat for a few months while no fundamental changes are made. In effect, pumping them into the company in its current state means pouring money into a black hole.

The irony is that the main problems and solutions are by now widely discussed and agreed-upon. Professional and independent management and corporate governance are lacking, the company is overstaffed, equipment is outdated and energy-inefficient, capacity utilisation — currently at an abysmal 15 per cent — is unworkably low, and political interference and corruption over the years have bled PSM dry. In part these problems have to do with shortage of cash, but equally they have to do with political will. One simple and immediate step that could be taken, for example, is to install an independent board of governors, consisting of professionals with real authority to hire, fire and review audits they have commissioned, who would appoint a CEO accountable only to them — not a political appointee or a former army officer, as the CEO appointed in April is, but a professional with relevant experience. But the restructuring and crackdown on corruption that could result from this reform might be too unpalatable in an election year. Also, much of the overhaul that is needed cannot be carried out without significant investments much larger than the size of the bailouts PSM is typically given, something the government clearly cannot afford. But privatisation would also be tricky politically as elections app-roach. In the absence of genuine concern for the economy, no one in power at the moment has the incentive to do what is needed to turn PSM around.