Pakistan Steel Mills: Difference between revisions
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In response to wide spread public outcry and call for action the [[Justice Iftikhar Chaudry|Chief Justice of Pakistan]] took a suo moto action against the privatisation citing irregularities in the process. The verdict was delivered on August 8, 2008.<ref>http://www.dawn.com/2006/08/09/top4.htm</ref> |
In response to wide spread public outcry and call for action the [[Justice Iftikhar Chaudry|Chief Justice of Pakistan]] took a suo moto action against the privatisation citing irregularities in the process. The verdict was delivered on August 8, 2008.<ref>http://www.dawn.com/2006/08/09/top4.htm</ref> |
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The Supreme Court on August 8, 2008 held that the entire disinvestment process of the Pakistan Steel Mills reflected a haste, ignoring profitability aspect and assets of the mills by the financial adviser before its evaluation. The transaction was the outcome of a process reflecting |
The Supreme Court on August 8, 2008 held that the entire disinvestment process of the Pakistan Steel Mills reflected a haste, ignoring profitability aspect and assets of the mills by the financial adviser before its evaluation. The transaction was the outcome of a process reflecting procedural irregularities, said the 80-page judgment in the PSM case. |
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On June 23, a nine-member bench of the Supreme Court had annulled the sale of the country’s largest industrial unit to a three-party consortium and had directed the government to refer the matter to the Council of Common Interests within six weeks. It had declared the $362 million transaction with the Russian-Saudi-Pakistan investors as null and void. |
On June 23, a nine-member bench of the Supreme Court had annulled the sale of the country’s largest industrial unit to a three-party consortium and had directed the government to refer the matter to the Council of Common Interests within six weeks. It had declared the $362 million transaction with the Russian-Saudi-Pakistan investors as null and void. |
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Authored by Chief Justice of Pakistan Justice Iftikhar Mohammad Chaudhry, the judgment said the entire exercise reflected |
Authored by Chief Justice of Pakistan Justice Iftikhar Mohammad Chaudhry, the judgment said the entire exercise reflected a haste by the Privatisation Commission (PC) and the Cabinet Committee on Privatisation (CCOP). The PC had processed the March 30 final report of the financial adviser the same day and a meeting of the PC board and a summary had also been prepared the same day when a six week time was mandatory to examine and fix a fair reference price for approval by the CCOP. |
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“This unexplained haste caste reasonable doubt on the transparency of the whole exercise and reflects CCOP’s disregard towards mandatory rules and materials, essential for arriving at a fair reference price,” it maintained. |
“This unexplained haste caste reasonable doubt on the transparency of the whole exercise and reflects CCOP’s disregard towards mandatory rules and materials, essential for arriving at a fair reference price,” it maintained. |
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The board had proposed to value the share of the mill at Rs17.43 but it was reduced to Rs16.18 without assigning any reason, the verdict said. |
The board had proposed to value the share of the mill at Rs17.43 but it was reduced to Rs16.18 without assigning any reason, the verdict said. The verdict said that keeping in view the annual net profit of the mill, its shares’ value should have been ascertained by offering 10 per cent equity of the mills on the stock exchange. |
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The verdict said that keeping in view the annual net profit of the mill, its shares’ value should have been ascertained by offering 10 per cent equity of the mills on the stock exchange. |
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“A constitutional court would be failing in its duty if it does not interfere to rectify the wrong, more so when valuable assets of the nation are at stake,” the judgment said. |
“A constitutional court would be failing in its duty if it does not interfere to rectify the wrong, more so when valuable assets of the nation are at stake,” the judgment said. |
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Revision as of 14:10, 24 January 2009
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In 1968 the Government of Pakistan decided that the Karachi Steel Project should be sponsored in the public sector, for which a separate Corporation, under the Companies Act, be formed. In pursuance of this decision, Pakistan Steel Mills Corporation Limited was incorporated as a private limited company to establish and run steel mills at Karachi. Pakistan Steel Mills Corporation concluded an agreement with V/o Tyaz Promexport of the USSR in January, 1969 for the preparation of a feasibility report for the establishment of a coastal-based integrated steel mill at Karachi. In January 1971 Pakistan and the USSR signed an agreement under which the latter agreed to provide techno-financial assistance for the construction of a coastal-based integrated steel mill at Karachi. The foundation stone of this vital and gigantic project was laid on 30th December, 1973 by the Prime Minister of Pakistan Zulfikar Ali Bhutto. The mammoth construction and erection work of an integrated steel mill, never experienced before in the country, was carried out by a consortium of Pakistani construction companies under the overall supervision of Soviet experts. Pakistan Steel not only had to construct the main production units, but also a host of infrastructure facilities involving unprecedented volumes of work and expertise. Component units of the steel mills numbering over twenty, and each a big enough factory in its own right, were commissioned as they were completed between 1981 to 1985, with the Coke Oven and Byproduct Plant coming on stream first and the Galvanizing Unit last. Commissioning of Blast Furnace No.1 on 14th August, 1981 marked Pakistan's entry into the elite club of iron and steel producing nations. The project was completed at a capital cost of Rs.24,700 million. The completion of the steel mill was formally launched by the then-President of Pakistan on 15th January, 1985. Pakistan Steel today is the country's largest industrial undertaking, having a production capacity of 1.1 million tonnes of steel. The real founders of Pakistan Steel Mills are Prof. Niaz Muhammad, Wahab siddiqui and Russian scientist Mickhail Koltokof. It was the hard work of Prof Niaz that thousands of scientists and technical staff got trained by him. His inspirations and innovations got him the highest award from president of Pakistan, and also from Russian Govt. The Govt of Pakistan has given him Pride Of Performance. His nomination for nobel prize was biggest respect what Pakistan achieved.
Location and site
Pakistan Steel is located at a distance of 40 km Southeast of Karachi at Bin Qasim near Port Muhammad Bin Qasim. It was found to be an ecologically preferable location, alongside a tidal creek and having a wind direction away from the city of Karachi. Pakistan Steel is spread out over an area of 18,660 acres (about 29 square miles (75 km2)) including 10,390 acres (42 km2) for the main plant, 8,070 acres (33 km2) for the township and 200 acres (0.8 km2) for the 110 MG water reservoir. In addition it has leasehold rights over an area of {convert|7520|acre|km2|0} for the quarries of limestone and dolomite in the Makli and Jhimpir areas of Thatta district.
Social obligations
Pakistan Steel, besides its core activities, has done a lot in making the environment in and around Pakistan Steel green and beautiful through the addition of three unique projects: the Quaid-I-Azam Park, The Quaid-I-Azam Cricket Park and the Quaid-I-Azam Beach. The Quaid-I-Azam Park, which spreads out over an area of 45 acres (180,000 m2), consists of a series of six interconnected lakes, lush green lawns and grassy terraces, colourful flower beds, fountains, life- size steel-made models of wild and marine animals, a jogging track, a bird sanctuary and mini-zoo, as well as a children's play and recreational ground and boating facilities. The other unique project, known as the Quaid-I-Azam Cricket Park, has been established amidst the picturesque surroundings of Steel Town, featuring sloping grassy terraces all around for spectators and four diagonally-located hillocks with seating arrangements to provide a panoramic view of the game. This is spread over an area of 32000 sq. meters and is equipped with all the necessary facilities, conforming to international standards. The third project, Quaid-I-Azam Beach, is being developed with the aim to provide a seaside recreational spot to the employees of Pakistan Steel, especially those residing at Steel Town and Gulshan-e-Hadeed. Mohammad Mushaffay Ahmed is majority times elected president of Pakistan steel mills union.
Pakistan Steel is also on its way to establish Quaid-I-Azam National Park over a vast area of 400 acres (1.6 km2) adjacent to Steel Town which shall be a tremendous contribution in the development of the environment.[citation needed]. The organisation also has a football team Pakistan Steel FC that currently competes in the Pakistan Premier League.
UNION LEADERS
Mushaffay Ahmed is majority times elected union leader of PSM and President of PROGRESSIVE WORKERS UNION. Muhammad Mushaffay Ahmed is presently a very renowned lawyer. He faced lot of difficulties during the Zia regime alleged in a very famous liaqatabad bomb blast case.
Privatisation
In May 2006[1], the government of General Musharraf privatised Pakistan Steel Mills. The consortium involving Saudi Arabia-based Al Tuwairqi Group of Companies submitted a winning bid of $362 million for a 75 per cent stake in Pakistan Steel Mills Corporation (PSMC) at an open auction held in Islamabad. the consortium of Saudi Arabia-based Al Tuwairqi Group of Companies, Russia's Magnitogorsk Iron & Steel Works and local firm Arif Habib Securities paid a total Rs21.6 billion ($362 million), or Rs16.8 per share, to take control of Pakistan's largest steel manufacturing plant. [1]
Tuwairqi Group of Companies, one of the Ieading business concerns in Saudi Arabia, also launched a $300 million steel mills project at Bin Qasim. The group will set up Tuwairqi Steel Mills (TSM), a state-of-the-art steel-making plant in the southern port city of Pakistan.
Suo moto notice
In response to wide spread public outcry and call for action the Chief Justice of Pakistan took a suo moto action against the privatisation citing irregularities in the process. The verdict was delivered on August 8, 2008.[2]
The Supreme Court on August 8, 2008 held that the entire disinvestment process of the Pakistan Steel Mills reflected a haste, ignoring profitability aspect and assets of the mills by the financial adviser before its evaluation. The transaction was the outcome of a process reflecting procedural irregularities, said the 80-page judgment in the PSM case.
On June 23, a nine-member bench of the Supreme Court had annulled the sale of the country’s largest industrial unit to a three-party consortium and had directed the government to refer the matter to the Council of Common Interests within six weeks. It had declared the $362 million transaction with the Russian-Saudi-Pakistan investors as null and void.
Authored by Chief Justice of Pakistan Justice Iftikhar Mohammad Chaudhry, the judgment said the entire exercise reflected a haste by the Privatisation Commission (PC) and the Cabinet Committee on Privatisation (CCOP). The PC had processed the March 30 final report of the financial adviser the same day and a meeting of the PC board and a summary had also been prepared the same day when a six week time was mandatory to examine and fix a fair reference price for approval by the CCOP.
“This unexplained haste caste reasonable doubt on the transparency of the whole exercise and reflects CCOP’s disregard towards mandatory rules and materials, essential for arriving at a fair reference price,” it maintained.
The board had proposed to value the share of the mill at Rs17.43 but it was reduced to Rs16.18 without assigning any reason, the verdict said. The verdict said that keeping in view the annual net profit of the mill, its shares’ value should have been ascertained by offering 10 per cent equity of the mills on the stock exchange.
“A constitutional court would be failing in its duty if it does not interfere to rectify the wrong, more so when valuable assets of the nation are at stake,” the judgment said.
Worth of Steels Mills
The worth of Steels Mills calculated on 30 June 1999, including 4500 acres of land and long term assets, came to $0.294 billion [2]. The worth of Steels Mills grew from 1999 to 2005 to become $349 million [3] and while a Saudi group Tuwairqi agreed to pay $362 million for Steels Mills. IN 1999, Steels Mills had loan of Rs.19.11 bn, which was being repaid and currently only Rs. 4 billion is left.
The government was privatizing Steels Mills in profit of $13 million and had not sold the access 14,500 acres of land of Pakistan Steel Mills and negotiations were on with the Sindh government to set up an Industrial Park on that land.[4]