PAKISTAN STEEL MILLS: THE POLITICS OF VALUATION

Pakistan Steel Mills (PSM), established in 1973, was once the largest industrial complex in Pakistan, employing over 18,000 people. However, over the years, the state-owned company has become a symbol of mismanagement, corruption, and political interference. The valuation of PSM has been the subject of much debate and controversy, as the company has struggled to remain financially viable in the face of persistent political and economic challenges. In this blog, we will examine the politics of valuation of PSM, and how it has influenced the company's operations and financial performance.

 

First and foremost, PSM's valuation has been influenced by political considerations, such as the allocation of resources and the distribution of profits. The company has been a target of political interference for decades, as different political interests have sought to influence its perceived worth for their own gain. This has resulted in a lack of accountability and transparency, as well as a disregard for financial discipline and operational efficiency.

 

One of the most notable examples of political interference in PSM is the allocation of government subsidies and loans. Despite being in financial distress for many years, the company has received numerous government subsidies and loans, which have only served to prop up its failing operations and increase its debt load. This has contributed to a cycle of debt and losses, which has further exacerbated PSM's financial difficulties.

 

Additionally, the political influence in PSM's valuation has also been demonstrated by the lack of proper financial management and control. The company has been plagued by corruption and mismanagement, as political interests have sought to control its operations for their own benefit. This has resulted in a lack of investment in modernizing the company's technology and infrastructure, as well as a disregard for financial discipline and control.

 

Another factor that has influenced the politics of PSM's valuation is the distribution of profits. Despite being a state-owned enterprise, the company has struggled to make a profit for many years. The lack of profitability has made it difficult for the government to justify the continued allocation of resources to the company. Furthermore, the distribution of profits from PSM has been the subject of political manipulation, as different political interests have sought to influence the allocation of resources for their own gain.

 

Finally, the politics of valuation of PSM has also been influenced by the government's management of state-owned enterprises. The government has struggled to balance its role as both a regulator and an owner of PSM. As a result, the company has been plagued by a lack of accountability and transparency, as well as a disregard for financial discipline and operational efficiency.

 

In conclusion, the politics of valuation of PSM highlights the complex interplay between politics and economics in the assessment of state-owned assets. Despite its once-proud history as the largest industrial complex in Pakistan, PSM has become a symbol of mismanagement, corruption, and political interference. The company's ongoing financial difficulties demonstrate the need for proper financial management and control, as well as a commitment to transparency and accountability. It is essential that the government and stakeholders work together to address the challenges facing PSM and restore the company to financial stability and operational efficiency.