ISLAMABAD: The government has decided to cover the losses suffered by the Pakistan Steel Mills (PSM) by leasing it out to a private firm prior to its privatisation.

Federal Minister for Industries and Production Ghulam Murtaza Khan Jatoi told DawnNews that the government had decided to issue tenders to initiate the process of awarding lease to a private firm till the completion of the process of privatisation of the PSM. He said the winning firm would arrange necessary raw material and also ensure the sale of products.

The government, it may be mentioned, earlier assured the parliament that it would take steps to steer the PSM out of crisis but so far nothing has been done in this regard, and now it appears that privatisation is being treated as the main option.

“When the PSM starts operating with 80 per cent capacity the losses will be overcome,” a senior official at the Ministry of Industries and Production said.

At present the PSM is facing a daily loss of Rs70 million and is running at 12 per cent capacity. Because of its own financial constraints the government is finding it difficult to keep offering bailout packages, hence the option of privatising 26pc of PSM shares.

The process will take more than 15 months. The PPP-led government had given Rs40 billion in bailout packages but that could not help the PSM to overcome its crisis.