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Centre’s help sought for recovery of Steel Mills land

Centre’s help sought for recovery of Steel Mills land

ISLAMABAD: The Pakistan Steel Mills (PSM) has sought urgent help of the federal government to recover more than 1,800 acres of land from the Sindh government and private parties amid the Centre’s efforts to dole out pricy land near Karachi’s Bin Qasim Port for ‘selective’ settlement of liabilities on the balance sheet of the sick unit.

This comes as a newly formed PSM Stakeholders Group (PSMSG) comprising its employees, pensioners, suppliers, dealers and contractors has put up a Rs65 billion claim against the country’s largest industrial complex. It has warned the government not to transfer the expensive land to the National Bank of Pakistan (NBP) and the Sui Southern Gas Company Limited (SSGCL) under a selective “Liability Settlement Plan” at throwaway prices.

The entire process that has turned a profitable entity with tremendous growth potential into a white elephant over the last 10 years boils down to real estate booty, says Mumrez Khan, the convener of the PSMSG. “The problem is not with the machine or the man behind it even now but the successive rulers who destroyed the mother of industries for vested interests,” he added.

The PSM was forced to shut down almost 28 months ago and is without a chief executive officer (CEO) for more than a year now. Its employees have not been paid salary for almost five months and its pensioners are running from pillar to post to seek payment of their dues.

The Centre has been making efforts to settle liabilities of the NBP and the SSGCL against its land on top of carving out another piece of land for the China-Pakistan Economic Corridor at rates questioned by many stakeholders, including former acting CEO who had to leave the job soon afterwards.

In a latest report to the federal government, the acting CEO of the PSM has updated the land situation, saying it had a total of 19,013 acres, mostly in Malir district of Karachi and Thatta district. This includes 10,278 acres under the main plant and 8,071 acres of the Township land.

Of this, 16,988 acres have been mutated in favour of the PSM in the record of the Board of Revenue but 2,024 acres have still not been mutated. This un-mutated land also includes 1,675-14 acres which was part of 3,059 acres surrendered by the Port Qasim Authority to the PSM in 1974-75.

The report said 1,377-6 acres under PSM Township paid/mutated land was forcibly resumed by the Sindh government in 2006 for establishment of educational institutions under the Higher Education Commission. “The said national cause has been abandoned. The PSM is struggling for cancellation/resumption order and its re-mutation in favour of PSM,” wrote acting CEO Arif Shaikh.

Also, another piece of PSM Township paid/mutated land of 400 acres had been resumed by the provincial government out of which 200 acres were allotted for parking of oil tankers and “remaining 200 acres have been illegally allotted to individuals and builders for which PSM is struggling for grant of equal land”.

Moreover, the PSM management has been struggling for re-demarcation/fixation of outer boundary of PSM Township land since 2011 to resolve a demarcation dispute over 178 acres without any success due to ‘unknown and unavoidable circumstances’. On top of that, another 244 acres have been encroached.

On the other hand, the PSMSG has written to the federal government that they are unheard victims running from pillar to post for revival of the mill and payment of salaries, final dues, bills, advances and security deposits and have collectively stuck up funds of Rs65 billion. It alleged that the mills had been made non-functional and financial crisis it was facing had been engineered with mala fide intent by the successive governments from 2005-17 as was evident from minutes of meetings of its board of directors.

The group said the gratuity dues had not been paid since April 2013, provident fund payments had been blocked ever since the mill was shut down in June 2015 and salaries were outstanding for months. Similarly, payments of many local and foreign suppliers and contractors for different deliveries had been stuck up.

It said about 7,600 acres were being given to the NBP and the SSGCL without valuation for settlement of its loans and gas bills and mark ups.

“This smacks of lack of integrity and transparency”, the PSMSG convener wrote, adding that 157 acres had been given to the PQA at the rate of 9.3 million (per acre) and 930 acres sold by ad hoc management at the rate of 13m (per acre) while the prevailing value of the land was more than Rs30m and Rs40m per acre respectively.

“This is a daylight robbery and should be reversed”, the group wrote, offering a substantially higher rate than the land was sold for. It has demanded performance audit of the successive governments and PSM managements between 2005 and 2017 to identify the causes of the mill’s functional and financial disaster.

Interestingly, former acting CEO Mohsin Haqqani had also warned the Privatisation Commission about Rs59 billion employees’ retirement liability, saying it should have priority over the liability of the NBP and the SSGC. He proposed that the land should be disposed off at market rate after proper valuation by an independent evaluator. “In the last two years, the valuation of land in Karachi has appreciated due to improvement in law and order situation and various other factors such as it is the only industrial land available in Karachi connected with Port, national highway and railway network, its value is in the range of Rs2.5 to Rs4 crore per acre approximately”, wrote Mr Haqqani on Sept 5 last year. But he was forced out within a week.

Published in Dawn, October 23rd, 2017

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