Ministry of industries and Pakistan Steel Mills’ management agree to proposal, move meant to clear Rs37b payment
The Pakistan Steel Mills’ (PSM) privatisation saga continued with different ideas being pitched, as the latest plan hinted at a possible land transfer to the Sui Southern Gas Company (SSGC), aimed at paying off outstanding liability worth Rs37.06 billion.
Representatives from the Ministry of Industries and Production and PSM agreed to transfer the land to SSGC in a bid to clear dues of the gas utility.
A senior official of the SSGC confirmed that gas supply to PSM had not been restored, due to non-payment of dues. He added that PSM had not made any payment since April 2015.
The issue of transferring land to SSGC was mentioned during a high level meeting held in the Ministry of Industries, chaired by Privatisation Commission Chairman Mohammad Zubair and Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi.
During the meeting, it was concluded that the payment of Rs60 million for September and due on October 21 would be paid. It was also decided that for the subsequent months, payment for gas would be made in advance.
PSM shall ensure that the cheque payments are honoured by its bank otherwise, gas supply would be disconnected and pressure reduced.
A senior official of SSGC told The Express Tribune that the PSM management had not fulfilled its commitment of clearing the bill for September and therefore, gas supply was not restored. He said that the SSGC wanted a payment guarantee which was not provided.
PC chairman Zubair assured the Ministry of Petroleum and Natural Resources that he would take up the issue with the finance minister while discussing the transaction structure.
Ministry of Industries and production and PSM management stated that they would have no objection to the proposed transfer of land as adjustment of SSGC’s dues, subject to reconciliation of accounts.
In order to save the national entity and prevent damage to the equipment, it was decided that gas pressure would be restored immediately.
It was informed that the total outstanding balance of SSGC against PSM was Rs37.06 billion till August 2015.
According to PSM, it will be in a position to roll 75,000 tons of slabs for production for hot/cold roll products in three months’ time and production of cast/rolled billets to meet day-to-day expenditures if gas pressure was restored.
Petroleum Minister Shahid Khaqan Abbasi said the issue of transferring land was taken up in the meeting, but no progress had been made in this regard.
Published in The Express Tribune, October 22nd, 2015.
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