ISLAMABAD: After the Heavy Mechanical Complex (HMC) was transferred to the Strategic Plan Division (SPD), the complex made a record sale of over Rs3 billion during the last financial year ended June 30, 2018.
“Since its inception, first time in its history, the HMC has made record sales crossing Rs3 billion mark during fiscal year 2017-18. The HMC has sold different products worth Rs1.2 billion to SPD and more than Rs1.8 billion to different public and private sector entities in the previous financial year,” top official sources confirmed to The News on Monday.
The SPD has given an advertisement for the selection of a new managing director for the HMC, for which around 14 candidates have applied so far. It is worth noting that incumbent MD Mohammad Ali, who is an engineer by profession, turned around HMC in the last couple of years, and the entity was now able to manage its affairs without getting subsidy or financial support from the national exchequer.
Without complete overhauling of HMC, it cannot be turned into a profit making entity on permanent basis, which requires a comprehensive plan for modernisation of its obsolete stalled machines.
Pakistan can seek Chinese help to modernise HMC, but a detailed work plan was needed to be developed first with the help of experts and consultants. The HMC which came into being with full cooperation of China during the decade of 60s and 70s could be termed a classic example of deep-rooted friendship between Pakistan and China.
However, Pakistan remained unable to modernise this entity, which witnessed declining trends following the 90s. The financial position of HMC touched the lowest ebb in 2016, and the situation was so alarming that the complex was not able to provide salaries to its employees and pension liabilities for several months.
Finally the last Pakistan Muslim League-Nawaz government on June 14, 2016 in its Economic Coordination Committee (ECC) meeting approved to handover HMC to SPD for power generation equipment and production of cement and sugar plants as well as construction of steel bridges.
The SPD in December 2015 had moved a summary to the then prime minister seeking approval for the transfer of HMC to SPD, and review of PC-I for the balancing, modernisation, rehabilitation and expansion (BMRE) in two phases.
Based on the prospective strategic gains that would be achieved as a result of this arrangement, other proposals included power generation through construction of new nuclear power plants, heavy equipment manufacturing and goal of manufacturing 30 percent mechanical equipment for nuclear power plants (NPPs) under an industrial complex comprising of HMC-3 at Taxila, as well as Peoples Steel Mills (PSM) for manufacturing alloy steel at Karachi and HMC.
In the wake of China-Pakistan Economic Corridor (CPEC), it is perceived that synergised work of HMC-3, PSM and HMC has potential to contribute in the indigenous manufacturing of equipment for NPPs, as well as growth especially in terms of mega projects and industrialisation in coming years.
The Ministry of Industries and Production supported the idea of SPD subject to the observations that the SPD should take over all liabilities of HMC and also ensure protection of service conditions of serving and retired employees under the prevalent service and pension rules.
Prime Minister's Office asked SPD to offer their comments on the ministry’s observations in response. In addition to their earlier recommendations, SPD also requested for an amount of Rs500 million for the salaries and expenditures of the company till June 2016. Cabinet Division also endorsed the views of the Ministry of Industries and Production.
The approved PC-I for BMRE might be reviewed to be executed in two phases. In phase-1 only essential machinery could be installed, which would reduce the requirement of funds for the government. The HMC being faced with acute losses of over Rs3.5 billion was put on the list of privatisation and excluded several times.
