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Federal govt faces resistance to getting PSM land

Federal govt faces resistance to getting PSM land

ISLAMABAD: The federal government is facing resistance from bureaucracy in getting 157 acres of “core land” of Pakistan Steel Mills (PSM) on 30-year lease for using as a dump yard for coal to be consumed in power projects in Punjab.

The bureaucrats serving in the Ministry of Industries, Privatization Commission and the PSM are reluctant to push the case due to lower lease price of the land and change in status of the core land that can only be used for the PSM operations, said sources. The bureaucrats are playing ‘safe’.

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The federal government is trying to get 200 acres from the PSM on 30-year lease through Port Qasim Authority (PQA), out of which 157 acres of land is marked as “core land”, showed the official documents. The dumped coal will be then transported to upward Punjab for use as fuel in power plants.

The government’s decision to cut the PSM “core land” and convert it to coal storage also suggests that the federal authorities are not keen to revive the country’s largest industrial unit, which is shut for the last 14 months.

In its second last meeting, “the Cabinet Committee on Privatization (CCOP) approved transfer of 200 acres of land from the assets of PSM to PQA for the purpose of setting up a coal stock yard for the power projects subject to payment of lease money to PSM at the current market rate,” according to the CCOP minutes.

As many as 19,013 acres are in possession of PSM, out of which 4,400 acres of land is marked as “core land”.

In its last meeting, the PSM board approved the handing over of about 157 acres of PSM core land to PQA at the rate of Rs9.35 million per acre for the lease period of 30 years for the construction of coal stock yard, subject to three conditions.

These conditions are issuance of NOC by Privatization Commission for leasing out the “core land”, withdrawal of stay order obtained by Sui Southern Gas Company from Sindh High Court against sale of assets and indemnification by the PQA that in case of enhancement of rates, the PQA will pay the additional rates.

The board determined Rs9.35 million per acre rate is about 38% lower than Rs15 million per acre demanded by the PSM management, according to the sources.

However, the PQA has based its demand on an earlier agreement between the PSM and SSGC under which the gas utility company obtained 11 acres of land at Rs8.5 million in 2014. It was offering 10% higher price than the 2014 rates.

But the three conditions set out by the board for the lease are not likely to be met.

“The PSM board should implement the CCOP decision and the Privatization Commission has nothing to do with the lease of land,” said Mohammad Zubair, Chairman of the Privatization Commission.

He said the Commission played its role by getting approval from the CCOP and after that, the PSM board was competent to take any decision.

The government is running the closed PSM affairs on ad hoc basis and has shown no interest in reviving the sick unit. Despite closure of the mill, last month the Ministry of Industries extended the contracts of employees of Hadeed Welfare Trust (HWT) for one year.

However, on Monday the ministry issued another notification, holding its earlier extension notification in abeyance.

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Despite the government’s indifference towards the country’s largest industrial unit, the PSM management needs Rs380 million per month for paying salaries and another Rs190 million for other operational expenses.

The official spokesperson of the Ministry of Industries, Sher Ayub Khan, said the land lease transaction was between two federal entities and due process will be followed.

Khan – a grade 21 officer – said since the PSM was on the active privatisation list, the decision has to come from the Commission.

On Monday, the PSM and National Industrial Park (NIP) agreed to lease 930 acres of land at Rs13 million per acre, suggesting that Rs15 million demand from PQA was not irrational. NIP would use this non-core land for setting up industrial zones.

Courtesy : Express Tribune



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