Pak Steel Mills: at least $100m needed; Senate discusses ‘options’

[AZADPAKISTAN2009]

For Every Nation it's Steel Industry is the Symbol of it's Industrial Ambition and it's Strength


https://herald.dawn.com/news/1153574
Images taken from article by Dawn

A legislative body of Senate on Wednesday was informed that complete operational need of Pakistan Steel Mills (PSM) required at least $100 million.

This was said by Advisor to Prime Minister on Ministry of Industries and Production, Abdul Razzak Dawood while addressing Senate Standing Committee on Industries, held at Parliament House under the Chairmanship of Senator Ahmed Khan.

The Advisor further said that various options such as public/private partnerships and foreign operational partners could be explored to revive this virtually dead enterprise that was entailing expenditure on account of pensions and salaries worth Rs120 million per month.

The meeting was attended amongst others by Senator Sitara Ayaz, Senator Kulsoom Perveen, Senator Barrister Muhammad Ali Khan Saif, Senator Nauman Wazir Khattak, and senior officers from the Ministry of Industries and Production, Pakistan Steel Mills (PSM) and National Productivity Organization.

While deliberating over the plight that has ailed PSM for decades, the Minister for Industries and Production, Abdul Razzak Dawood stressed the need for business acumen for its revival. Endorsing the views of the Advisor, Senator Nauman Wazir Khattak opined that the ‘government has no business to be in business’. This, he said, was the businessman’s prerogative, because he would go through any lengths to attain his goals.

Senator Sitara Ayaz said that it was refreshing to listen to the Advisor and his vision regarding this enterprise. However, she said that she did not approve of privatization. She regretted the removal of Chairman PSM, despite Committee recommendations against it. Senator Barrister Muhammad Ali Saif was of the opinion that this was a breach of privilege and that strict notice must be taken regarding this.

Chairman Committee, Senator Ahmed Khan instructed the Ministry for submission of all record of appointment of the new CEO and removal of the old. He said that on behalf of the Committee, he hoped that a sound decision is taken and that Pakistan benefits from this golden enterprise that has been lost. He said that a decision regarding this issue could only be taken once the meeting of the Economic Coordination Committee (ECC) is conducted on Monday.

While discussing the petition of Ali Ahsan, Assistant Manager, National Productivity Organization, Ministry of Industries and Production, Chairman Committee Senator Ahmed Khan instructed that all suspension orders against Ali Ahsan be revoked immediately. He also said that a new CEO must be hired within 60 days.

• Formed in late 70's with Russia's Cooperation
• Started production in 1981
• Mill became disfunctional under Nawaz Sharif's second term.
• 2003-2008 It was making Billions of Rupee in Profit under Musharraf's (Military's man's charge, Military 's watch )
• Covers almost 19,000 Acres
• 2019 the Mill/Factory remains none functional due to negligence in Appointment / Funds / Operation Excellence

Iron Making factory

Soviet Era machine traces

Workers head home after day shift
No dress code , no Factory boots , no Uniform
No Engineering hats

Metal scraps and trucks parked some where in mills

Steels mills employee sits in 2 bedroom company provided home waiting for work to restart

Retired workers waiting for Pension/Retirement funds

Company's own , market area called Russian Market

Sindh's Top assets lies in tatters , neglected betwen

1999-2008 Musharaf Sahib (100% Profitable)
2009-2013 Zardari Government (Neglected)
2013-2018 Nawaz Sharif Government (Neglected)
2019-Present Awaiting (REVIVAL)

 

[Chakar The Great]

Should be privatized as early as possible.

 

[AZADPAKISTAN2009]

Where the World has reached !!!! Competetion

World Steels Mills , Austria
Cost of Brand New Steeles Mills (350 Million Euro)

 

[MIRauf]

PPP, PMLN and probably MQM won't let it. Too big of count for manpower, same as PIA.

 

[AZADPAKISTAN2009]

Asset Belongs to state of Pakistan and it's citizen , as such it can be 100% demolished and reconstructed like the European Steeles Mill with Robotics and Modern Engineering for 350 Million Euro

VALUE OF LAND
@ 19,000 ACRES comes to around 8 to 16 Billion






Here you can see 12 homes built on just 1 Acre

228,000 homes can be constructed on 19,000 Acres

If each home was built with 50 lakh rupee

• 8 Billion Dollar USD is value of Land

If houses are sold at 100 Lakh rupee or 1 Crore each then

• 16 Billion Dollar USD is value of land

There is also a Train line which can take people living in this community directly to Port Downtown of Karachi city




Option A:
Government spends 100 Million Dollar and Revives Steeles Mills

> Main machinery is fixed
> New Machinery is imported
> Organization is revived , so it starts making
50 Million Dollar -150 million Dollar profit
> Workers are given Engineering training / Uniforms
> New Accountable Management 5-10 people looks after Asset
> Goal to make 400 million dollar per year in 5 years




Option B:
1) Government , sells the Land to Housing Development for 4 Billion Dollar

> 3 Billion USD goes to Government of Pakistan , state bank Dollar Reserve

> 750 Million Dollar is Used for Distribution to SPARCO (Buy Satellite, Rockets etc)

> Government uses 350 Million Dollar and makes a New Steeles Mills like in Europe
100% like the mills in AUSTRIA , Europe

3) Housing Development Authority , sells the land for up to 16 Billion Dollar, make 12 billion
Profit, when houses are constructed , new construction jobs open up in Sindh



**50 million can be distributed to retired workers
** Younger workers , are retrained and moved to new Steeles Mills


Option C:

• Government offloads the Factory to Pakistani Investment Group
• Or Government offloads it to Pakistan/Chinese Joint ownership Group
• Land is Leased and requires yearly payments first 15 years are free

 

[Samlee]

Options Are Very Much There If Government Has Political Will


Or It Can Do What It Does To Every State Owned Heavy Industry.Hand To NESCOM

 

[Paul2]

For Every Nation it's Steel Industry is the Symbol of it's Industrial Ambition and it's Strength

And very frail symbol it is. With great respect to my counterpart, in the humblest manner possible, I bring that to your attention.

Heavy industries are questionable businesses in this day and time, when 20+ nations try competing in that industry, each outdoing other in level of subsidies. You can't make steel profitably when those countries sell steel below its cost.

You are better to take advantage of the situation, and buy that steel at rock bottom prices when you can.

Why not to sell PIA, PSM, cotton and canneries, build factories for light industries? That will be the long awaited and so needed re-industrialisation.

 

[Murgah]

Sell some land of steel town and u will get a huge sum of money

 

[ziaulislam]

Should be privatized as early as possible.

It was offered for free and noone wanted to buy it...Pakistani delusions with privitzation is fascinating ..you have no bankruptcy laws ...hx of nationalization and hx of political and judiciary bigotry and you think someone will buy it..well they did and it was reversed by suoreme court with popular support from the people

 

[Syed1.]

I liked Asad Umar's idea of having a board of industry experts to run these government orgs.

This Hafeez Shiekh is a sucker for privatization if we leave it to him he will even privatize the air we breathe.

 

[ziaulislam]

I liked Asad Umar's idea of having a board of industry experts to run these government orgs.

This Hafeez Shiekh is a sucker for privatization if we leave it to him he will even privatize the air we breathe.

Privitzation isnt bad but if you can do it..hafeez sheikh did a very good job with privitzation but that was legacy of rapid growth of mushi era..tgings are different smart people are putting their money in india and Bangladesh

 

[xyxmt]

scarp this piece of shit mill, it is considered garbage today, This is a very tiny steel mill with huge budget. stop being proud of this garbage please this is nothing but a scam.

 

[CrazyZ]

These old Soviet plants are very inefficient and need to be privatized or mothballed. There is a global over supply of steel. Investing in a new large blast furnace may not be a good thing unless you can produce at globally competitive prices. I would go for a smaller electric arc mini mills to reduce our dependence on imported steel. Get scrap and melt it down. We may be able to use gasified thar coal in DRI process to produce sponge iron for the electric arc furnace.

 

[maithil]

Merely restarting will not work. Considering how China dumps steel in all countries. The mill must be upgraded and anti-dumping policy on imports should be put.

 

[Rakesh]

My views,
1. Revival of Steel plant is possible. China can help in rebuilding the plant in cost effective manner. Considering the availability of land, 3 MTPA steel plant is possible on existing land.
2. I am not aware of availability of raw material. Hoping that it is not big problem.
3. Biggest challenge will be competition from imported Chinese steel. Pakistan shares friendly relation with China, it may be difficult to impose anti dumping duty on Chinese steel.
4. Above problem can only be solved, if Pakistan decides to produce some special category steel in new plant and put restriction on import of the same.