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June 15, 2020

The saga of a mill


June 15, 2020

In a most heartless and irresponsible decision, the federal government has removed close to ten thousand employees of the Pakistan Steel Mills (PSM), with little concern for them and their dependents.

The PSM was a symbol of Pakistan’s friendship with the Soviet Union; a lot could have been built on the foundation laid down by ZAB back in the 1970s, but Gen Zia’s dictatorial regime took Pakistan into the Western alliance system, and with that any hopes of self-reliance and industrialization in the country ended. Let us not forget that during the democratic government of ZAB, the country never needed the IMF’s bailouts, nor was Pakistan funded by the West. Bhutto’s era witnessed the highest levels of public sector development spending.

The economic logic behind large-scale industries was to lay down an industrial infrastructure which reduces import dependence and makes countries self-reliant in areas of critical importance; cement, sugar and steel industries were part of the plan.

Built in 1974 with a total investment of Rs24 billion, the PSM recovered its investment long ago. According to one of its former chair of directors, the mill used to earn upto Rs 5 billion per annum until 2008-09. What went wrong in 2009 onwards is a trillion dollar question, because its current debts and losses go up to $2 billion.

The PSM has seen eleven years of gross negligence and suffered losses. Since 2015 it has been closed, without production, while still costing Rs700 million per month. All this clearly shows that successive governments lacked a sense of ownership to this national asset. It used to provide respectable employment to over 23,000 people, now reduced to 9,300 workers, and these people have been removed from their services by the current federal government. Nothing can justify this decision.

Dr Kaiser Bangali has rightly said that the “dismissal of 10,000 PSM employees is heartless and utterly reprehensible; especially under current conditions.”

Workers are the only people who have been hard hit by its closure, and they are the ones who have a real stake in the PSM’s survival. The current government which came to power on the promise of making it operational is instead taking away the livelihood of the people. Such attempts in the past have failed.

The PSM is not in losses because the steel industry is in decline. It is mismanagement, half-hearted attempts to revive it, inefficiencies and above all criminal negligence that have created this mess.

The PTI would be the third government in power planning the privatization of the PSM. Nawaz Sharif and Gen Musharraf’s governments in the past took the decision to sell off. Both governments wanted to pay off the country's debt; Nawaz Sharif wanted to pay off its $19 billion debt, and Musharraf, after failure to break the begging bowl, wanted to pay off $40 billion; the debt now stands close to $100 billion. We would need at least 100 steel mills to sell and pay off the debt.

Privatization has served the interests of the rich at the cost of workers. Gen Musharraf did a great disservice to the people of Pakistan by privatizing profit-making PTCL and selling KESC without making sure that the money would be paid to the government.

The PSM, PIA, Railways, PTCL and KE are a few examples of failing governance, and howa once futuristic looking country which built assets has become dysfunctional. It is a crisis that has not been made by civilians alone in this country. Gen Zia and Mian Nawaz Sharif sold state enterprises to private interests, but the process of privatization did not help the economy take off. Deregulation, free trade, and opening up the market for global products produced growth for many countries in the developing world, including in India and Bangladesh. Pakistan is perhaps an exception.

The fear is not far-fetched that private interests have their eyes set on the land of the PSM, and major land-developers could already be making plans for housing schemes for the rich and affluent. This land belongs to the provinces. The federal government got this land allocated for a specific use; once not in use, the land needs to be rendered back to the owner.

Sindh should resist any attempts to sell the PSM’s precious land to private interests. Land is a provincial subject, and under the Acquisition Act this land was allotted for a specific purpose for federal use. No law allows the federal government to indulge in the business of selling provincial land.

The PSM saga offers a glimpse into our collective inability to manage assets, and produce wealth, employment and development for our people. Who has failed us? Who has failed the PSM? We have enough scapegoats to blame. The class that rules has nothing to lose; even from scraps they will make money. It is the workers of this mill, and the people of this country, who suffer the consequences of lack of action.

Email: [email protected]

Twitter: @mushrajpar