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CPEC reviving loss-making entities

ISLAMABAD: The Public Accounts Committee (PAC) on Tuesday asked the Privatisation Commission to remove the State Engineering Corporation (SEC) from the list of organisations to be privatised as its otherwise loss-making subsidiaries are set to become profitable after the launch of the China-Pakistan Economic Corridor (CPEC).

This is the second time in a week when a loss-making entity has expressed the hope of its revival because of the CPEC.

On December 8, the management of Pakistan Railways had informed the PAC that under the CPEC the railways tracks would be upgraded for the transportation of goods of Chinese firms and the railways would be earning billions of rupees.

On Tuesday, the managing director of the SEC and the Heavy Electrical Complex (HEC), another subsidiary of SEC, informed a PAC subcommittee that its sister entity, the Pakistan Machine Tool Factory (PMTF), would also become profitable as the security division created by the army to safeguard CPEC was emerging as its major client.

He said earlier PMTF was selling weapons, including anti-tank guns, to the army but a few years ago the military leadership decided to procure the weapons through another source.

This resulted in the sudden drop of PMTF’s production making it a loss-making entity, he added.

The official, however, expressed the hope that the security division established for CPEC by the army would alone purchase weapons worth Rs700 million from the organisations in the current fiscal year.

He said Rangers and the Frontier Constabulary were also major buyers of the PTMF products and had paid Rs450 million for different weapons.

Likewise, he said, the HEC had improved its revenue manifold and suggested that it should not be privatised.

Dr Arif Alvi, a member of the PAC, endorsed the stance of the HEC management and said only loss-making entities should be privatised.

He said in the past opposition parties agitated against privatisation of the PIA and they can also protest against the selling of such companies which had overcome their financial weakness.

Dr Azra Fazal Pechuho, who was presiding over the meeting of the subcommittee, directed the PAC Secretariat to write a letter to the Privatisation Commission to remove the SEC from the approved list of entities to be privatised.

Irregularities in PSM

The PAC also took up audit paras related to the Pakistan Steel Mills (PSM). The auditors pointed out irregularities worth billions of rupees in the financial affairs of the PSM.

According to an audit report, despite facing a huge loss the PSM management extended undue favour to private contractors.

Mohammad Ali Shah, the chairman of the PSM, told the committee that the management had already asked the National Accountability Bureau (NAB) to take action against the corrupt officials of the PSM as well as the contractors who availed of the undue favour.

He said the government allotted PSM’s land to different organisations but had the land been leased out in a proper way the management would be in a position to clear all the dues of its employees.

He said out of the 19,000 acre land, the PSM was utilising 45,00 acres for mill and parking space while its housing colony spread over 8,000 acres.

The rest of the land has been distributed among different organisations who are earning handsome revenues by further subletting the land, he added.

The committee directed the PSM to provide complete details of its land as well as the residents of its housing colony by next meeting.

Courtesy : Dawn News

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