Amid a row over the exclusion of Rs33 billion contingent assets from Pakistan Steel Mills’ (PSM) balance sheet, Privatisation Commission Chairman Mohammad Zubair said on Wednesday that it was actually the management of the industrial unit that did not take them into account. The management of the PSM, ahead of its privatisation, did not show Rs33 billion deferred tax assets on its balance sheet of up to March 2015 since the management did not treat the entity as a going business concern, said Zubair while addressing a press conference. The chairman said the deferred tax assets can only be realised once the entity becomes profitable. He claimed that there was no plan of further investment in PSM. The issue of contingent assets’ exclusion arose during the approval process of the transaction structure for PSM’s privatisation that was to be made by the Cabinet Committee on Privatisation (CCoP). The Chinese, in a report, have confirmed what everyone knew all along: the PSM is plagued with inefficient management and needs an overhaul. The PSM, on its part, says it needs government support and millions of dollars to stage a comeback. The government, on the other hand, is reluctant to spend the little taxpayers’ money it gets on an ailing entity. At the same time, its attempts to privatise the PSM have been met with fierce resistance from the Sindh government, which does not want to buy it, but does not want the centre to sell it off either. The SSGC is claiming over Rs37 billion in dues from the PSM and has suspended supply to it till payments are cleared. In the midst of this drama, the proposal to transfer PSM’s land to SSGC makes little sense except to the PSM management, as this will entail that the steel mill will clear billions owed to the SSGC without spending a nickel. But what on earth is the SSGC supposed to do with land that is part of an industrial unit? The original transaction structure did not even include land transfer as part of the sell-off. While the PSM management will make a push for this proposal, it makes little sense for the SSGC to accept it, which also claims to be bleeding money every year.
pk.shafaqna.com
