The plea of the stakeholders of the Pakistan Steel Mills (PSM) to Prime Minister (PM) Imran Khan to hold off the privatisation of the entity and revive the government structure with the help of professionals is worth consideration because they are pointing out some easily solvable problems. The fact that the institution has been employing individuals over its capacity, out of political favours, has impacted the revenue generation ability of the industry. These political appointees often also lack the skill to execute the business plan and thus a network of incompetent individuals run the industry and there are no reports on their performance. Due to the association with the government, they are treated as government employees and since government employees do not have performance reviews, these individuals enjoy job security too.
These are problems which have a concrete solution and can be easily implemented, however, while these solutions must be considered, it must not be forgotten that the last government had the same plans but could not execute it. There is a reason for that – the debt over time has increased to the point that the cost for production, especially as a government-run industry, has increased and that left no choice for the government but to rely on imports.
The machinery of these plants has become obsolete over time and reviving them would require more resources, ones that the government cannot afford at this point. There needs to be a proper investigation of the audits that have been done in the past and more audits would again require more public funds. Industries which are already incurring such huge losses without managing to produce any improvement should not be revived without proper assessment of the situation at hand. Government-run industries are plagued by red tape, an aspect which can easily be overcome by privatisation. Private owners depend heavily on performance charts and also keep pace with the day to day developments in business, which usually take up a lot of time in a government set up.
The government has already promised job security to the employees of government-owned industries. This puts a lot of pressure on them because even if a drive is carried out to replace the political appointees, they can challenge the decision in the courts due to their job guarantee and that is going to prolong the development even further. The government must consider all these aspects before finalising whether or not to privatise these industries because privatisation alone is also a very challenging task for a new government.