Pakistan News

Ministerial overreach

Ministerial overreach

PETROLEUM Minister Shahid Khaqan Abbasi may be correct in pointing out that the outstanding amount owed by Pakistan Steel Mills to SSGC for gas supply has risen too much, but by saying that the issue can “destroy and finish” SSGC he has indulged in uncalled for hype.

It is a fact that the steel mills is lagging far behind in making its payments to SSGC, and the outstanding amount at Rs35bn is too large for the gas distribution company to carry for very long.

But it is also true that public-sector enterprises do not sink, let alone stand destroyed and finished, due to outstanding receivables.




The context for Mr Abbasi’s remarks is the impending privatisation of the steel mills, whose accumulated losses have reportedly risen to Rs104bn, far too large for a government bailout.

The minister claimed that a proposal is under consideration to transfer land belonging to the steel mills worth about Rs35bn to SSGC as a settlement for the outstanding dues, but the mills’ management has to approve the proposal first.

A number of issues come up when we consider the minister’s remarks. First of all, such alarmist language, speaking of companies being destroyed and finished, should not be used at the ministerial level.

We are accustomed to hearing such words from the heads of public-sector entities when they want to highlight their liquidity problems from outstanding receivables, but elevating them to the level of the minister adds a new dimension.

Second, another context for the remarks is the sharply growing gas shortages in the country, which have begun to bite in the gas-surplus provinces of Sindh and Balochistan as well.

In either case, whatever the context in the mind of the minister, it would be better if he used his own platform in the National Assembly to focus the debate more on the policy questions facing the gas sector and left more operational issues like liquidity shortages at SSGC to be resolved in the appropriate forum.

Published in Dawn, December 24th, 2015

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