Chinese steelmaker shows interest in PSM’s revival

ISLAMABAD: China’s biggest steelmaker MCC International on Thursday expressed its interest in reviving cash-bleeding Pakistan Steel Mills (PSM) that has been incurring losses for over a decade.

A delegation of the state-owned Metallurgical Corporation of China (MCC), led by its Vice President Wang Zhou, called on Adviser to the Prime Minister on Finance, Revenue and Economic Affairs Hafeez Shaikh.

The finance ministry said the Chinese delegation showed interest to invest in the steel industry with demand of nine million tons, which is increasing by 15 percent every year.

“It (the delegation) offered support for revival, operationalisation and improving the capacity of Pakistan Steel Mills (PSM) on public-private partnership basis,” the ministry said in a statement.

The government is weighing an option to rejuvenate the state-owned PSM under the public-private partnership mode in phases that was estimated to cost around $800 million. The plant would be revived to achieve its built-in capacity in the first phase within one and a half-year, while the production capacity would be jacked up to three million tons in the second phase.

The PSM shut down its furnaces in 2015 and it consumed almost Rs200 billion of state funds on various heads till last year from 2008 when it used to be a profitable organisation. The government has to pump an estimated Rs400 million every year to pay salaries of the PSM’s employees.

The finance adviser briefed the delegation about the scope of investment opportunities in the country. He said the government has taken a number of steps to improve the ease of business in the country.

Meanwhile, Shaikh told businessmen that the government is focusing on improving the ease of doing business to facilitate the business community and attract foreign investment.

“The role of private sector is highly important in improving the economy of the country,” he said, talking to the presidents and representatives of Lahore, Faisalabad, Sialkot, Karachi and Federation of Chambers of Commerce and Industry. He urged the members of business community to play their role to increase the volume of exports.

The representatives briefed the finance adviser about various problems and challenges being confronted by the economy. They gave various suggestions aimed at improving the economy and industrial sector. The delegation proposed ways and means to enhance the exports. The delegation shared proposals for the budget 2019/20 with the finance adviser.

Shaikh assured the businessmen that the proposals of the chambers would be considered and a business-friendly budget would be presented.