Saturday, 17 January 2015

MoF criticised for failing to resolve TSML issue

Ministry of Industries and Production (MoI&P) is said to be annoyed at the Ministry of Finance for not deciding the issue of M/s Tuwairqi Steel Mills Limited (TSML) pending for the last several months, well informed sources told Business Recorder. The sources said, ambassadors of Saudi Arabia and South Korea also met with the top brass of Finance Ministry and requested that issues of gas prices should be settled immediately.

Governor Sindh Dr Ishrat ul Ebad also wrote a letter to the federal government saying that with the shutdown of the mills, 1600 employees will lose their jobs. TSML is a joint venture and is in a shutdown mode. A delegation of South Korean investors also met Commerce Minister, Engineer Khurram Dastgir and sought his help to resolve the issue amicably.

In November 2014, M/s Tuwairqi Steel Mills Limited (TSML), offered a 15 percent (126 million shares) equity as preferred shares with 10 percent dividend per annum to GoP with a guaranteed buyback of shares at book value after 10 years in lieu of cheap feed gas, sources close to Finance Minister told Business Recorder.

Ministry of Petroleum maintains that the cost of government approval to supply natural gas to TSML at a cheap rate would be Rs 5 billion per annum totalling Rs 25 billion in five years. Chairman Al Tuwairqi Holding Co. Hilal Hussain Al-Tuwairqi wrote a letter to Finance Minister Senator Ishaq Dar seeking his help to resolve this dispute as early as possible.

M/s TSML claims that it has significantly improved its offer in consultation with its equity partner M/s POSCO of South Korea and the officials concerned in the GoP. Previously M/s TSML had offered 7% equity as ordinary shares which has been improved to 15% (126 million shares) equity as preferred shares with 10% dividend per annum to GoP with a guaranteed buyback of shares at book/break-up value after 10 years. According to M/s TSML, GoP will be free to either retain its shares or to convert the preferred shares into ordinary shares and divest these in the market with the consent of the existing shareholders. "You would appreciate that despite the fact our plant is in a shut-down mode now for over one year, still not a single member of TSML has been laid off, with this hope and keen desire of ours that we have to restart operation of this plant and go for its further integration," Dr Hilal Hussain Al-Tuwairqi maintained.

President Pak Saudi Chamber of Commerce and Industry, Mian Mehmood, told Business Recorder that it is very important for the government of Pakistan to approve the case of TSML on an urgent basis to ensure more foreign direct investment in Pakistan. "I have personally requested Prime Minister Nawaz Sharif to use his good offices to bring the mill out of crisis," he added.

"If the government of Mian Nawaz Sharif does not resolve the issue, investment from Saudi Arabia and South Korea will not come to Pakistan," he claimed. Officials in the MoI&P argue that they have submitted a summary to the ECC headed by Finance Minister, now the ball is in the court of Chairman ECC. The functioning of Industries Ministry is poor after the Minister for Industries and Production, Ghulam Murtaza Jatoi submitted his conditional resignation.
Copyright Business Recorder, 2015

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