ISLAMABAD: The government and the Pakistan Steel Mills Corporation (PSMC) on Tuesday invited expressions of interest (EoIs) through Privatisation Commission, from prospective investors to acquire at least 51 per cent or up to 74pc issued share capital of Steel Corporation together with its management control.

The interested investors have been asked to submit the EoIs before Sept 30.

With the objective to revive steel plant and as approved by the federal government, the PSMC has incorporated a wholly-owned subsidiary private company limited by shares called ‘Steel Corp’. The PSMC and Steel Corp have filed ‘Scheme of Arrangement’ with the Securities and Exchange Commission of Pakistan for the transfer of Core Operating Assets to Steel Corp, which means that the steel plant and power generation plant, the supporting infrastructure and works and other material assets, in consideration of which Steel Corp will issue its shares to the Pakistan government.

The PSMC revalued the Core Operating Assets, including steel plant, at fair market value which was recorded in the PSMC financial statements for the period ending December 2020. The PSMC has identified tentative land measuring 1,229 acres situated at Pipri and Bakran, Bin Qasim owned by the PSMC where Core Operating Assets, including the steel plant, are situated, and is expected to cater production capacity enhancement up to 3 million tonnes per annum.

Plant has a designed production capacity of 1.1m tonnes per annum

The Pakistan Steel Mills Corporation, a private company limited by shares wholly-owned by the government, is the country’s largest integrated steel manufacturing plant having designed production capacity of 1.1m tonnes per annum, with a built-in potential for expansion up to 3m tonnes per annum.

The PSMC core land will be leased to the Steel Corp through a land lease deed on arms-length basis. The draft land lease deed including the commercial terms and conditions will be made available to pre-qualified bidders as part of the bidding documents for their review and comments. The land lease deed will be finalised prior to the bidding process.

The existing utility connections both electricity and gas and power generation license will be transferred to Steel Corp without encumbrance. Availability of indigenous gas or Re-gasified Liquefied Natural Gas to Steel Corp will be confirmed by the Sui Southern Gas Company at prevailing rates.

Meanwhile, the Pakistan Steel Mills Corporation Stakeholders’ Group has asked the government to review the process of inviting EoIs prior to the disposal of review petition and PSM employees’ illegal retrenchment case pending in courts.

Convener of the Stakeholders Group, Memrez Khan, in a letter to the ministry of industries and production and the privatisation commission proposed a tripartite meeting between privatisation commission, ministry of industries and production, federal and provincial government and stakeholders to help resolve the long-pending issues related to privatisation from 2005 to 2021. The ‘process’ from 2005 to 2021 negatively cost to PSM and exchequer more than $12 billion in a period of 16 years, whereas PSM required around $300m to enhance plant production capacity.

The PSMC stakeholders group’s representative delegation would be available to assist the government in reviving the steel mills with local human resource and funding.

Mr Khan in his letter to the ministry of industries and production stated that PSM is yet another target of non-transparent privatisation process. Instead of appointing a financial adviser of international repute fairly and transparently, the privatisation commission has appointed as transaction advisers a consortium of multiple organisations which are controversial for this transaction and others have no experience for advising on highly technical project like PSM, he said.

Published in Dawn, September 1st, 2021