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PSM agrees to give 1,500 acres for CPEC industrial zone


5/13/2017

ISLAMABAD: The board of directors of Pakistan Steel Mills (PSM) on Friday gave approval to giving 1,500 acres of its land on lease for the construction of an industrial zone under the China-Pakistan Economic Corridor (CPEC), but left price decision on independent assessors.

The board also agreed to give another 930 acres for  building the National Industrial Park (NIP) at book value of Rs13 million per acre. The book value is significantly lower than market rates, which go up to Rs20 million per acre. A committee will negotiate with NIP management to settle the years-old issue.
 
PSM cuts jobs to reduce salary expenses
Engineer Abdul Jabbar Memon chaired the board meeting held in Islamabad.
 
Regarding 1,500 acres of land for the CPEC Special Economic Zone, the board decided that A-category assessors would determine fresh book value of the land for 2017. Prime Minister Nawaz Sharif has already given its nod to the proposal of giving PSM land for the industrial park. The Cabinet Committee on Privatisation had directed to settle the land issues at prevalent market prices.
 
Although the board agreed to give land for NIP, over 750 acres had already been “illegally” given to influential private parties, said sources in the Ministry of Industries and Production. Board of Investment Chairman Miftah Ismail played a role in that matter, they said.
 
However, Ismail denied any role. “On the desire of the finance minister, I intervened sometime back only to settle the land price issue between NIP and PSM as it was affecting foreign investment,” he said.
 
He said he never favoured any party and if NIP was allotting land without securing lease from PSM, it was NIP’s fault.
 
Effectively, the board allowed carving out 15% of the remaining land to give it to private parties for various activities, continuing the process of selling the country’s precious assets.
 
Out of PSM’s total land area of 19,013 acres, about 1,950 acres have already been illegally occupied or given on lease to various departments.
 
PSM assets
 
PSM is the largest and only integrated steel plant in the country with installed production capacity of 1.1 million tons per year that can be expanded to 3 million tons. However, it has remained closed for the past two years due to government apathy.
 
Of the total area, 4,400 acres are marked as core land. Assessors hired by the Privatisation Commission had valued the entire land area at Rs150 billion in 2015. The evaluation was done for privatising the sick industrial unit.
 
Sources said the decision to give land, approved for NIP, to private parties without prior approval of the PSM board was illegal. Lease agreements could not be signed without making PSM a party, they said.
 
PSM has also given 157 acres of core land to the Port Qasim Authority for Rs9.3 million per acre for using it as a dump yard of coal being imported for CPEC power projects.
 
PSM shut down two years ago after Sui Southern Gas Company cut gas supplies for delay in payment of Rs19 billion worth of utility bills. Since then, the government has not made any serious effort to revive the sick unit.
 
‘CPEC opens enormous opportunities’
 
According to sources, Privatisation Secretary Shahid Mehmood during the board meeting expressed the desire that the mill’s assets should be utilised to the extent possible. However, this cannot be done without restoring gas supplies. SSGC is not ready to resume supplies without settling the outstanding bills.
 
A Chinese company has been making efforts to acquire PSM, but the federal government has not taken the proposal seriously. Employees of the mill are not being paid timely and their last three-month pay is pending.