Senate body takes officials to task over sugar subsidy, closure of PSM


Parliamentary body appeals to PM to revive PSM, says it must not be sold at any cost



Stopping short of recommending action against the ‘criminal negligence’ of the 13-month long closure of the Pakistan Steel Mills (PSM), the National Assembly’s Standing Committee on Industries appealed to the prime minister to personally intervene to resolve the crisis.

The committee severely criticised the government for protecting the sugar industry by burdening the people and recommended finalising a new sugar policy with budgeted subsidy for the mills. The committee turned down the request of Pakistan Sugar Mills Association (PSMA) to order closure of the National Accountability Bureau (NAB) enquiry into the subsidy for sugar exports.

The meeting of the committee was chaired by Pakistan Tehreek-e-Insaf leader Asad Umar. At the outset of the briefing, he refused to listen to the power point presentation from the bureaucracy on the state of the steel mill.


“Tell us who is responsible for the 13-month long closure of the largest national asset,” Asad Umar asked. The Ministry of Industries’ representative said that the ECC had shifted the jurisdiction of the PSM to the Privatisation Commission (PC) while transaction manager of the PC said they followed the directives of the Industries Ministry for the operations of the PSM.

After the finger-pointing, Umar said, “PSM is in a mess due to the inefficiency of the Ministry of Industries.” He then asked how much output will bring the PSM to break-even. The transaction manager said 77 per cent would do it. The chairman asked how he assessed the figure of 77 per cent and he said that it was given by the Industries Ministry, which in turn said they got it from CFO of PSM.

A perturbed Umar said that with such kind of professionalism shown by a transaction manager, Industries Ministry and CFO, it was obvious why the steel mill had been closed for over a year. The PSM only requires 40 per cent output to reach break-even. If 77 per cent output is achieved, then it would be paying dividend to the shareholder, the government.

Such criminal negligence requires that the culprits should be handcuffed and sent to jail, Umar said, and asked what recommendation the committee should make. The PSM CFO said it should be privatised. Umar said he would not recommend that at any cost. The committee recommended that the prime minister should resolve the issue by calling inter-ministerial meeting.

The committee also recommended clearing the salary, provident fund and pension arrears of the employees.

A heated debate took place between PSMA representatives and members of committee on the payment of arrears to the sugarcane growers. Umar said their issue was the same and government was responsible for the mess in the sugar sector. The government is giving massive export subsidy to sugar mills and to further protect them, has imposed exorbitant regulatory duty on sugar import.


The committee termed the new auto policy non-competitive. During the hearing it was disclosed that the policy did not have measures to enforce safety and environment standards on the local assemblers. The committee recommended giving the same incentives to all the investors as, under the current policy the new players will start assembly after four years while the existing players will not introduce new models until then. The committee gave a one-year time for implementation of safety and environment standards in locally manufactured vehicles which, if not implemented, would mean that the government was not interested about the safety of the people.