ISLAMABAD: The government has set up a new committee to devise a sustainable plan for the future of Pakistan Steel Mills (PSM), the state-owned industrial giant that has been bleeding resources since its shutdown in 2015.
Built by the Soviet Union in 1970s, the state-owned largest industrial facility has become a huge drain on government resources and has not produced steel at its 19,000-acre facility since June 2015.
Notably, in October last year, the government decided to cancel the privatization of Pakistan’s major industrial unit due to waning interest from Chinese companies, largely influenced by the declining global steel demand. The PSM has been faced a shutdown in June 2015
Due to unfavorable global steel demand and economic conditions, three Chinese companies withdrew their bidding. This raised concerns about transparency, as there was only one bidder left.
The Privatization Commission board after their response, decided to stop the privatization process in its meeting on October 6, 2023. Earlier, the PC board was tasked to look after this process, but now, the Ministry of Industries and Production will oversee the operations of PSM.
It is to be noted that following a resolution adopted by the apex committee of the Special Investment Facilitation Council (SIFC) during its last October session, the government formed this committee and notified it on April 24, 2024.
Chaired by the Secretary of the Ministry of Industries and Production (MOI&P), the committee is composed of key stakeholders from pertinent government bodies and industry representatives. Notable members include the Senior Member of the Board of Revenue (BoR) from Sindh, the Joint Secretary of Corporate Finance, and the Chief Executive Officer (CEO) of the Pakistan Industrial Development Corporation (PIDC), headquartered in Karachi.
Representing the interests of PSM workers is a designated union representative, alongside two independent members from the PSM Board. To this effect, the Industries and Production Division has written to the Pakistan Steel Insaf Labour Union (CBA) to nominate a representative of (CBA) union to participate in the committee on behalf of workers of PSM.
Furthermore, the Director of Technical Affairs at PSM holds membership, while the Corporate Secretary of PSM serves as the committee's secretary.
The primary focus of this committee is to engage in thorough discussions aimed at crafting a viable strategy for PSM.
Among the key considerations is the evaluation of options such as the potential closure of M/s Steel Corp (Pvt) Ltd and the subsequent auctioning of its assets, including plant and equipment. Additionally, the committee will explore avenues for the operational revival of PSM, potentially through private sector involvement, while addressing any associated matters.
The committee is poised to play a pivotal role in charting the path forward for PSM, ensuring its sustainability and continued contribution to the nation's economic landscape.
The PSM last posted a profit of Rs9.5 billion in the financial year of 2007-08. Since then, its financial health crumbled and started accumulating huge losses in Pakistan People's Party and Pakistan Muslim League Nawaz tenures.