KARACHI: Around 17 companies, most of them foreign, have expressed interest in running Pakistan’s largest steel manufacturing complex, Pakistan Steel Mills (PSM), which the government wants to manage through a public-private partnership, a senior official at the ministry of industries has said.
Once the producer of almost half the country’s steel needs, state-owned Pakistan Steel Mills in Karachi, designed and funded by the Soviet Union in the 1970s, now contributes Rs15-20 billion in annual losses to the national exchequer and has been dormant since since 2015.
Officials say the facility has the capacity to expand to produce three million tonnes of cold and hot-rolled steel annually. But managers over the years have failed to upgrade machinery, losses have spiralled and production has tumbled 92 percent in the past decade as demand for steel tanked during the 2008 recession and customers turned to cheaper Chinese products.
But the government of Prime Minister Imran Khan says it is resolved to turn around the facility’s fortunes, calling for international companies to run the Mills in partnership with the government.
“Now we have 17 companies who are interested in running it [PSM],” Aliya Hamza Malik, parliamentary secretary for textile, commerce, industries and production, told Arab News on Sunday. “There are some Russian companies, Chinese companies … some of them have visited Pakistan Steel Mills as well and everything will be done in a transparent manner.”
Six Russian firms including the METPROM Group, three Chinese companies including the Metallurgical Corporation of China (MCC), four Ukrainian entities including Ukrainian National Foreign Economic Corporation, one American firm and three Pakistani companies have expressed interest in running the 19,000-acre facility.
Malik did not elaborate on the exact nature, or progress, of discussions with individual companies.
“We are not going to privatize it completely, we will run it on a public private partnership [basis] with the major share of the Pakistan government,” Malik said. “We are going to run it at full capacity and when it will run on full capacity more employment will be generated ... we will be able to fulfill our requirement as well as we will be able to export steel.”
On Friday, the government terminated 4,500 PSM employees out of the Mills total 9,350 workers.
Malik said the government had cleared all salaries due since 2013 and given laid off employees a “handshake deal.”
The Sindh government, run by the opposition Pakistan Peoples Party, has opposed the federal government’s decision to terminate PSM workers and says the Mills' fate must be decided by the Sindh government. Karachi, where the facility is based, is the capital of Sindh province.
PPP chairman Bilawal Bhutto Zardari said in a tweet last week: “The heartless government’s sacked 4500 workers of Pakistan Steel mills. PPP will return each & everyone back to work. The land of this historical industrial asset belongs to the people of Sindh, we will not let the PTI get away with this economic murder.”