Spineless steel

PSM has a major role to play in Pakistan’s progress particularly in the context of CPEC

Just weeks after the government endorsed a plan to revive the Pakistan Steel Mills, it has swiftly returned it to the chopping block. The government now says it has found six interested buyers for the state-run-enterprise.

The mills, which abruptly shut down in 2015 for unidentified reasons and have been bleeding Rs400 million every month ever since in just paying salaries of its staff, have all been written off by the government.

The drastic change has come after the reshuffle in the federal cabinet in the middle of April which saw the Pakistan Steel Mill’s biggest advocate Asad Umar replaced by Dr Hafeez Shaikh. Umar had championed a public-private partnership route to revive the mills rather than outright sell the national asset. The PSM has a major role to play in Pakistan’s progress particularly in the context of the China-Pakistan Economic Corridor (CPEC) with demand for steel projected to increase to about 20 million tonnes by 2025.

It is thus unclear whether the interest shown by two Russian and two Chinese companies and two other companies in procuring the mills is in this respect or if they are just interested in the land owned by the state-run organisation — as has been the case in the past.

If the latter is the case, one has all the right to ask how and why the government’s priorities have changed. Will the PSM become the first victim of the IMF loan? If so, which other state-owned entities will be returning to the chopping block? More importantly, how else does Pakistan expect to manage its steel demand for CPEC projects and ensure the progress of the country?

In this regard, it appears as if Islamabad is hedging its bets once again on the Chinese who have pledged to set up a steel mill in the port city of Gwadar. The PSM requires drastic intervention to revive it. But outright selling it will signify a stark departure from the ruling party’s stated policy and a demonstration of how it lacks steel in any negotiation.

Published in The Express Tribune, May 19^th, 2019.

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