While one side of the story says that suspension of gas supply is the sole reason for the halt in production activity, the other side mentions inefficient management and failure to clear dues of Sui Southern Gas Company (SSGC) are to be blamed for the ailments that plague the country’s largest industrial unit.
According to the PSM, total outstanding dues of the SSGC amounted to Rs18 billion while the rest – Rs17 billion – are surcharges on late payment.
While the Economic Coordination Committee, in its meetings in April 2012 and 2014, decided to reschedule them over a decade, a concrete development is yet to be seen.
SSGC, on its part, had issued multiple notices to PSM, warning them of gas suspension.
The Ministry of Industries and Production and its petroleum counterpart had decided in a joint meeting held on September 18 that outstanding dues will be paid through lease of PSM land. It was also decided that the PSM will pay Rs50 million, but will clear SSGC dues on a prepaid basis in the future. Action is awaited on this front as well.
While the PSM looks to clear dues in tranches, SSGC – already riddled with revenue shortfalls according to its managing director – wants to be paid at once.
The PML-N government had approved a Rs18.5-billion-bailout package in April last year, which it further augmented by Rs2.5 billion to pay employees’ salaries.
The PSM management had claimed that the Rs18.5 billion cash injection would help achieve 77% capacity utilisation by January 2015 – a target that was never achieved. A week ago, the government approved another Rs1 billion for the mill to pay salaries to its employees.
Market talk suggests that the privatisation of PSM extends beyond the realms of economics and into the dirty area of politics.
The process, however, has hit snags already. A delegation comprising officials of the Privatisation Commission and PSM are currently visiting China to invite investment interests.
Earlier, a delegation from China also visited the PSM plant. But while efforts are under way, experts suggest the privatisation will not be an easy task.
After the 18th Amendment, institutions with strategic importance are also property of the province. Thus, strictly legally speaking, the Council of Common Interests and the Sindh government need to be taken in confidence as well. The provincial government’s stance on privatisation, however, is well known.
According to the financial advisor’s report, the PSM has faced a total loss of Rs135 billion which is 87.6% of its total assets since 2008-09.
The report adds that the total assets of the PSM are worth Rs154.2 billion. The amount includes the value of PSM land at Rs120.7 billion.
But if the financial advisors’ report is anything to go by, it is the current administration that is to blame for the losses PSM has faced, adding that an overhaul is the need of the hour. To meet its cash needs PSM has leased a large part of the land it owns to ASCC (arabian Sea country club)
