The government on Thursday handed over Pakistan Steel Mills (PSM) to the Privatization Commission (PC) for restructuring before its eventual privatisation, taking first meaningful step to stop haemorrhaging. The decision to give the PC the driving role was taken by Prime Minister Nawaz Sharif during a meeting on Thursday morning, according to an official from the Ministry of Finance and Privatization . Following the PMís decision, the Economic Coordination Committee (ECC) of the Cabinet formally endorsed the decision to involve the PC in the affairs of the PSM. The ECC was chaired by Minister for Finance and Privatisation Ishaq Dar . Under the Privatization Ordinance of 2000, the restructuring of any entity that has to be approved for privatisation by the Council of Common Interests , and Cabinet Committee of Privatization has to be performed by the PC. The ECC decided that the Chairman Privatization Commission and the Ministry of Industries should work together and come up with a reasonable proposal for consideration by the ECC, according to a statement issued by the Ministry of Finance . The PC will try to find out an innovative solution for the restructuring of the PSM before its privatisation, said Mohammad Zubair , chairman PC. He said the PC will be having direct involvement and the final say in all affairs of the PSM from now on. The Commission will decide on the appointment of a new Board of Directors and Chief Executive Officer, he added. ĒThe PSM is a nightmare. More than half of its officers are under matriculate and under intermediateď, said Zubair. The PC Board will soon meet to appoint a Financial Adviser for restructuring and privatisation of the PSM. The Ministry of Industries tabled a set of various options in front of the ECC, that included maintaining the status quo, liquidating the entity, reviving it by giving a Rs92.3 billion financial package, or restructure and privatise it. The PSMís liabilities have increased to Rs106 billion and in the last five years bailout packages of Rs44 billion were given to the PSM. According to the Ministry of Industries working, a capital injection of Rs31.6 billion , financial restructuring of Rs51.8 billion loans and Rs6.6 billion waivers in gas payment penalties will be required before privatisation. Another Rs14.2 billion will be needed to give golden handshakes to over 4,000 employees. The previous government inducted about 5,000 loyal party workers in the PSM, which is one of the reasons of increasing losses and also why the PPP is opposing the privatisation. The decision to involve the PC was a step in the right direction to improve the condition of the PSM, said Shafqat Nagmi, Secretary Ministry of Industries and Chairman of Board of Directors of the PSM. The ECC directed the Finance Ministry to release Rs2.5 billion for paying 45 daysí salaries of workers of the PSM. Still the salaries for the month of December will remain outstanding. Urea sale price The ECC decided that both imported and locally manufactured urea would be sold to farmers at a uniform price of Rs1,786 per 50 kilogram bag with immediate effect. To ensure the uniformity of prices the government will bear a subsidy of Rs741 per bag. The ECC also decided to extend the period for providing gas to Engro Fertilizer at concessionary rates. The ECC decided that the concessionary period of 10 years be extended by the number of days for which SNGPL could not supply gas for operation of the plant, according to Ministry of Finance handout. The Law Division supported the move. The ECC decided to withdraw the 5% concessionary rate of customs duty available to Flexible Packaging industry and Gypsum board industry on import of BOPET films. The ECC also approved providing sovereign guarantee of $26.8 million to China Electronics and Technology Corporation (CWTC) Beijing, China . The guarantees were provided against a loan taken for establishment of National Electronic Complex of Pakistan . The Ministry of Water and Power placed a summary before the ECC for Liberty Power Limitedís gas pricing issues. The ECC fixed the Qadirpur gas price for sale to Liberty Power Plant equal to 67.50% of the weighted average of a basket of crude oil import during the six months period which will be notified on 6 monthly basis.
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