ISLAMABAD, June 21: The government on Wednesday requested the Supreme Court to consider investment plans of new buyers of the Pakistan Steel Mills (PSM) and, if not satisfied, set up an investigation commission instead of striking down the sale.

Attorney-General Makhdoom Ali Khan requested the apex court to read the undertaking given by the three-party consortium that it would immediately bring investment to enhance PSM’s production capacity and never use its land for any other purpose.

He said if there were still doubts the bench could direct the government to conduct an investigation to determine whether the PSM’s privatisation had fetched a realistic price, and report in three months.

The attorney-general said the court could even give a directive that if someone still had any grievance about the contents of the (investigation) report, he should move the high court under Section 28 of the Privatisation Ordinance 2000.

He said that while hearing petitions challenging steel mills privatisation, the apex court should keep in mind that its jurisdiction was limited, confined to determining the question of law, and that it could not summon witnesses to record evidence, a jurisdiction only enjoyed by the high court.

In a fresh undertaking, he said, the consortium had assured that an investment of $250 million (Rs15 billion) to $300 million would be brought to make the steel mills economically viable and further investments would be made to raise its capacity to three million tons annually.

Justice Tassadduq Jillani described the assurance as a smartly written non-committal letter.

The AG conceded that the bidders did not produce the letter on their own; it was rather a result of the court’s proceedings and observations and thus served as an instrument to protect people’s interest.

Chief Justice Iftikhar Mohammad Chaudhry wondered why the government could not invest Rs15 billion to expand the mills instead of paying the same amount under the golden handshake scheme for its employees.

Tracing the history of the steel mills, the attorney-general said the government did its best to improve its productivity by raising tariff barriers and injecting massive funds, but it received zero dividend.

He assured the court that steel mills’ huge land would not be plotted out and sold for commercial plazas and said it would continue to house the steel mills in future.

He said there was no doubt that the government received a lesser price for the steel mills, but during the process it got a commitment that the PSM would always be run as a steel mill.

When the bench asked why an independent commission should not be set up, instead of asking the federal government to conduct an inquiry since in that case one of its agencies would carry out the probe, the attorney-general explained that giving direction to the government would be in line with the language of Section 27 of the privatisation ordinance.

Citing the example of the famous 1973 Watergate scandal, he said governments all over the world were increasingly investigating various issues and as a result of such an investigation then US president Richard Nixon had to resign in disgrace. He exerted pressure but failed to shake Archibald Cox, the special prosecutor. Nixon then contacted attorney-general Elliott Richardson and ordered him to fire Cox. Richardson refused and was himself fired. Nixon then turned to the assistant attorney-general to fire Cox. He too refused and was fired. Nixon finally found someone who would fire Cox, but the resulting backlash forced Nixon to have a new special prosecutor appointed and ultimately had to resign himself.

Similarly, he said, in the case of president Clinton the entire episode of Monica Lewinsky had come up under investigation.

Advocate Ahmed Bilal Soofi, representing a Karachi businessman who had accused one of the bidders, Arif Habib, of being involved in a Rs18 billion fraud, explained that the DCF (discounted cash flow) formula which the cabinet committee on privatisation had approved in the case of steel mills should also involve the value of the land if more than 50 per cent shares had to be sold.