ISLAMABAD: The National Assembly Standing Committee on Industries and Production has opposed the government’s plan to privatise Heavy Mechanical Complex (HMC), Taxila, since the public-sector entity has become profit-earning and is starting to overcome its losses.
According to the committee’s report, laid before the lower house on Friday, the government was also asked whether the HMC should work under the Ministry of Industries and Production, or whether it should be transferred under control of the Ministry of Defence Production or the military’s Strategic Plans Division (SPD).
“[In] 2015-16, the net profit of HMC was Rs100 million,” the report stated, adding that it was not possible to wipe out all of the entity’s losses in a couple of years. “Therefore, there is no reason to privatise it,” the committee recommended.
The committee also urged the government to provide salaries to all HMC employees on priority basis.
Committee members visited HMC last year, the report stated, and had recommended that HMC should be connected with China-Pakistan Economic Corridor (CPEC)-related projects.
The Cabinet Committee on Privatisation had approved the strategic sale of HMC shares to Cargill Holdings for Rs905 million in March 2015. However, the firm was not able to make the required payments in time and the deal was struck down. Now, the government is looking to put the HMC on its privatisation list again.
In June last year, the Public Accounts Committee (PAC) of the National Assembly had also opposed the HMC’s privatisation, since it had become a profit-earning entity.
This is not the first time abortive attempts at privatising HMC were made. In 2006-07, four investors initially expressed an interest in acquiring the entity and two interested parties pre-qualified, but neither put up the ‘earnest money.’
In 2011-12, four other parties expressed interest, but only one met the pre-qualification criteria, which then failed to deposit the earnest money after conducting due diligence.
Then, in 2013, three parties pre-qualified, only two conducted due diligence, but neither deposited the ‘earnest money’ due to the company’s weak condition.
Established in the early 1970s, HMC has designed, manufactured and installed 46 sugar mills and 22 cement plants of various capacities, as well as providing bridges and equipment for power plants.
Other engineering goods manufactured by the HMC include road-construction machinery, industrial boilers, cranes, railway equipment, truck chassis and axles, equipment for fertiliser plants, chemical plants and oil refineries, besides a variety of steel structures, castings, forges, spare parts and components.
HMC consists of two major industrial units; the Mechanical Works, and the Foundry and Forge Works. The facilities at the HMC include fabrication, machining and assembly, steel, cast iron and non-ferrous foundry, forging, heat treatment, surface treatment, galvanising, woodworking, dies and tool room and other infrastructure, supported by comprehensive quality assurance and control systems.