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This blog is for students, managers and those lay people who are interested to contribute to, comment on or simply share their workplace problems and are keen to learn about issues relating to public finance, corporate finance and macro-economic management affecting their lives.

Sunday, June 13, 2010

Where Mittal failed.....

Pakistan Steel Mills is in the news again, this time not-for-very-wrong reasons. Already plundered State Enterprise has been given an injection of Rs. 25 billions to help it survive the current crisis, breath for a while, be ready for another bout of plunder and become worthless so that any Tom, Dick and Harry can afford to buy it. Last time, it was Indian Steel Magnate Mittal trying to buy through his front man but he failed because of the Supreme Court activism. Is it not the same Steel Magnate who has now employed our  PM of yesteryear?
The present Pakistani PM, while justifying Rs. 25b bail-out package to Pakistan Steel Mills has declared PSM as a national assets. Express Tribune, of International Herald Tribune, in a recent Article has stated that over the past two years, PSM has lost over Rs45 billion. This is in addition to the fact that the corporation has been a perennial basket-case that has caused nothing but headaches for the government. And now, on Friday, the government announced a Rs25 billion bailout package for the company.
The company could fetch $362 million five years ago if its privatization was allowed to go ahead. That amount at the present exchange rate comes to Rs. 31 billion. And mind you, PSM was not a loss making enterprise then. Imagine how much will it fetch today when it does not have even sufficient funds to pay off its basic obligations like salaries and wages of the employees. The bail out package will bail out the company for an interim period but will it eventually bail it out to make it sellable, let alone profitable?  The article in the Express Tribune is silent about it. There is no doubt, though the paper questions this assertion, that PSM is a national asset as PM has correctly pointed out.  But does it mean that it is open to plunder by whoever can lay his hands on it. Please comment.


  1. Please correct the spellings. The correct spellings are Pakistan Steal Mills.

  2. sad..thts not encouraging situation..