KARACHI: This is with reference to a report in your newspaper relating to Russia offering assistance of $500 million to increase the capacity of Pakistan Steel Mills (PMS) from 1.1 million tons to 1.5 million tons every year.
First of all, it is worth reiterating that the mills output was to be 1.1 million tons annually but it was never able to produce this much. In fact, its financial position is now so bad that it is losing almost a billion rupees every month and it is producing around 30 per cent of its capacity.
While the Russian offer is well-intentioned, the problem lies with other factors. One is interference by the mills’ labour union and the other is overstaffing. The number of people needed to run PSM, even at full capacity, is around 10,500, but it has 17,000 employees on its payroll. Will someone in a position of authority answer why this is the case? The answer is obvious. Successive governments have used PSM to provide jobs to their supporters and this has systematically destroyed this most important industrial asset.
The issue of expanding its capacity is not new, it has been going on for the last 10 years. If the government really wants to save PSM from collapse, some immediate steps will have to be taken.
Mukhtar Ahmed
Published in The Express Tribune, November 14th, 2011.
