Government decided to privatize Steel Mills as it became a 'white elephant': Hammad Azhar

ISLAMABAD: Terming the Pakistan Steel Mills as a "white elephant", Minister for Industries and Production Hammad Azhar said Thursday that the government had decided to privatize it as it had become a burden on the national exchequer. 

He said that PSM employees had not been working for the last many years and now they would get a financial package of around Rs2.3 million per employee as compensation. Besides, he said, employees could also contribute to productivity in the private sector.

He was addressing a press briefing along with PSM Chairman Amir Mumtaz and Managing Director Sher Alam. Azhar said that the PSM turned from a profit-making institution to one that was running in losses in the 2008-09 tenure of the PPP government and its operational works were shut down during the PML-N government. 

He said that at one stage, the PSM had 30,000 employees out which many employees had retired and now there were an estimated 9,000 employees working for the mill. He said the PSM was closed for the last five years and previous governments could not devise any plan for it.

The minister said that the government had to spend Rs55 billion to pay salaries to employees of a closed mill. He said when the PTI government came into power, the Pakistan Steel Mills was facing a loss of Rs176 billion and its interest was also increasing with each passing day.

Azhar said that the previous governments could not handle this issue, therefore, the present government had to take the final decision about the fate of the mill in the larger interest of the country.

The minister said that with this decision, the government would save Rs700 million of the people's hard-earned taxes a month. He said that the Supreme Court also wondered why the government was paying the workers of a closed mill.

He said that around 15 parties were interested in taking over the operational work of the PSM project. He clarified that only the operations of PSM would be privatised while thousands of acres of land would still remain in the custody of the PSM corporation.