Originally Posted by Spock

Lets also talk about another thing the CJ tried to stop, the acquisition of illegal farm houses by Mush and Shaukat, and please limit yourself to 2-3 paras.

Originally Posted by Khehkeshan

LOL, moving onto the next made up scandal so soon?

Originally Posted by Sa1eem

Those Farm lands were allotted by pat political thugs (BB and NS) to their goons. Purpose of those Farms were to grow vegetable for Islamabad. As I mentioned above, because those land cannot be used for any other purpose their value is nominal. But problem started when original allottees started using those farms as farm houses and sold them as farmhouses to others.

Rich bought them from original allottees and did not used them for farming vegetable but made them farmhouses for their picnic (it also increased the price of those lands from nominal value to a bit more, not similar to residential lands but still a tenth of that or so). Mush and SA bought their Farmhouses from those who already got them allotted from past thugs (NS and BB). What Iftikhar did was issued notices to all farm owners that they are misusing the land by making them farmhouses as their purpose is not farmhouse but vegetable farming.

So, you cannot call that corruption of Mush and SA, but their innocently overlooking the purpose attached to lands they bought.

Originally Posted by Spock

There are too many kehkashan, too many scandals and too little time.

Originally Posted by Khehkeshan

Bring them all, and within time all will be proven as false.

Originally Posted by Sa1eem

I am sorry that I did not read all the arguments but anyone saying that $362 million for 75 percent shares of Pakistan Steel Mill was not fair value does not know anything. Pakistan Steel Mill was a loss making venture and never gave any profit until few years before Privatisation was due. Most of Pakistan Steel mill plants were obsolete and the output capacity was 1.1 million ton (after lot of stretching). Any comparable Steel Mill anywhere in the world, even in Western countries could not have fetch much more than $500 million (total price Pakistan Steel Mill was getting, as $362 million was 75 percent stake) with all conditions attached including baggage of unproductive 1000s of labour force, plus commitment by buyers of further investing on Steel Mill that was beneficial to government as that 25 percent shares was to get more worth with time as investment and profitability would have increased, plus higher taxes with higher profit another advantage.

Let argue about Land price first than we can see if Mill price was good or not?
Lands of PSM that got included as part of sale was 4547 acres and that land was actual land where Mill was situated. Some claim that value of this land was Rs 20 million an acre, but they are wrong. Why?

Land around PSM got worth because of PSM. Value of 20 million per acre is for those lands that can be used for any purpose, not one that has fixed purpose. For PSM land to get valued at 20 million, PSM had to dismantle Steel Mill and get permission from government to use it for any purpose and even than it would be worth much less than 20 million an acre. If there would have been no permission, land would be worth nothing. For instance, if there is farm land in centre of Islamabad without permission of getting that land used for any other purpose, than that land would be worth nothing, maybe not even 1 million an acre. Reason is simple, and that is, anyone who would buy that land has to do farming on that land and would see what he can get out of that land from farming per year. Same is true of PSM lands, as that land has fixed purpose and that is to have Steel Mill there.

As for land price, I am sure that many may be feeling surprised by me saying that its value cannot be calculated and compared with what free land outside Steel Mill in that area could be worth. Reason again is simple, that the value of those lands are worthless unless government gives permission to Steel Mill that they can dismantle the Mill and use that land for any purpose they want. Government permission is very important when worth of land is concerned, as same land that can only be used for any particular purpose (like Steel Mill only), for only farming, for residential purpose or commercial, can cost different prices.

So, anyone who would buy that land he has to put Steel Mill there (well, Steel Mill was already there) and now it is that Steel Mill that has to be business venture for any investor to buy that land and Mill. In most business ventures, if one invests 500 million dollars (total price of PSM), the venture has to give return of around 100 million dollars (or more) a year for it to be business. Pakistan Steel Mill was not even near to that return. I do not think that if I would have $500 million dollars than I would buy a Steel Mill that has thousands of employees (as to get rid of employees cost money too and regardless of profit, they get paid) and that Mill does not give a net profit of 75 to 100 million dollars a year. I might buy a Steel Mill with lower return if I would be expecting higher return soon, as investing of 500 million dollars would cost investors anything around 40 to 50 million dollars in interest alone every year.

If anyone thinks that $500 million for a Steel Mill with 1.1 million ton steel output and baggage of thousands of unproductive workers is not reasonable price than give me a single example where a Steel Mill with 1.1 million ton output was sold at much higher price than that. [As for land, I have already mentioned that land price is nominal unless there is permission of government for its use other than Steel Mill purpose].

Now, let see what other Steel Mills got?

Here is one: Luxembourg-based ArcelorMittal claims that Esmark breached its August 2007 agreement to purchase the Sparrows Point plant for $1.35 billion. The proposed sale fell through in December because of financing problems
http://www.businessweek.com/ap/finan.../D90I7RV00.htm
Sparrows point plane: Employees 2500 and produces 3.5 million ton of Steel. Just look at efficiency of the Mill, that it employs 2500 people compare to more than 10 times by PSM, and produces 3.5 million ton Steel, that is more than 3 times what PSM produces. Still it seems that $1350 was a good price, that fell and seller (Mittal and Co) are upset.

Compare another sale (the highest price for a Steel Mill): World biggest Steel Mill in Ukrainian (Kryvorizhstal Steel Mill) was initially sold for $850 but later bought by Mittal group for $4.8 billion (around 10 times what PSM was getting). But then, Ukrainian Steel Mill has 56000 employees and produces around 8 million tons of Steel but that is not the end as Mill also includes Iron ore Mine that has possible reserves of 1000 million tons of iron ore. Mittal group bought this Mill and considered that he paid too much for it,

http://www.nytimes.com/2005/10/25/business...nyt&emc=rss

[Kryvorizhstal's production capacity could reach 10 million tons a year, and the acquisition comes with an iron ore mine with possible reserves of one billion tons, Aditya Mittal, Mr. Mittal's son and the company's president and chief financial officer, said during the conference call. Kryvorizhstal also produced 17.1 tons of iron ore.
.....
The $4.8 billion sale price was more than double the price originally set by the Ukrainian government, though with steel prices softening in some regions, some analysts in London wondered if Mr. Mittal overpaid]

Well, there are 100s of Steel Mills going for sale and even though I am not putting prices of all, I can tell this much that PSM price (100 percent) of $500 million was not that mean (especially, government could have got much more for their 25 percent share later on once Mill would have started working more efficiently).

Originally Posted by Sa1eem

I am sorry that I did not read all the arguments but anyone saying that $362 million for 75 percent shares of Pakistan Steel Mill was not fair value does not know anything. ).

Originally Posted by hanibal

.......As per the valuation land and facilites of the mill has market value of RS 25,755 Million, again for ur information this market value is for the year 1999.

.......

Originally Posted by hanibal

Thats ur problem man, here u don't read there u don't hear.

USD 362 Million ( as of today) is equal to RS 24,344.50 Milllion

and just for ur information

As per the valuation land and facilites of the mill has market value of RS 25,755 Million, again for ur information this market value is for the year 1999.

I think i need to say no more.


anyonce can download the valuation from:

http://www.edb.gov.pk/Corporations/S...ak%20Steel.pdf

Originally Posted by Sa1eem

Did you read my post?
Well, believe me, you are confused about market value of land

Anyhow, let me tell you something. Worth of any land is dependent on permission of use for that land. If government would like to sell Faisal Mosque (Islamabad) with conditions that it cannot be demolished, purpose of Faisal Mosque use would not change, no shops or selling would be allowed on the Faisal Mosque premises, than Faisal Mosque would be worthless and land Faisal Mosque is built would be useless too.

Same is true for land PSM is built. The land is valueless unless government gives permission that owner of PSM could do anything with the land, even demolish PSM and convert that land into whatever they like. If that would not be the case than value of PSM would be dependent on what Steel Mill makes in profit (as Steel Mill is business venture, not charity for anyone who keep that Mill).

Other thing you should know is that, all lands used to build Steel Mill is leased land (on 100 years lease) and has permission for only one use (Steel Mill), so land has to be valued with that in mind and that means, it has at most nominal value.

Originally Posted by Sa1eem

Did you read my post?
Well, believe me, you are confused about market value of land



.

Originally Posted by Sa1eem

Well, believe me, .

Originally Posted by hanibal

U openly claims for not reading the posts and u r asking me to read urs,

U post is read one read all, either it would be talking and twsiting facts for defending Mushy, or it would be against NS.

So why waste time to read ur comments.

Originally Posted by Sa1eem

That is why I did not commented on any post but on people claims that land price was suppose to be 20 million per acre as that is open market price in that area (and there were posts that claimed that and that claim to me is foolish, and that is what I wrote about in my post). As for you, you commented on my post without reading. My post was one issue post regardless of that issue mentioned in one post or all, but your post was specific.

Originally Posted by burqaposhx

Great post Saleem. Man you know how to hit a home run .

Unfortunately, no matter what you say, the socialists will continue their mantra of "mayen naa maanoo".

My fear is that the socialists will one day dismantle the steel mill and actually sell off the land for commercial and housing projects. Off course then they will be proven right about Rs. billion worth of land. But then the steel mills will be no more!

Originally Posted by hanibal

and where did i said i have not red ur post.