Export processing zone to be set up on PSM land
Pakistan told IMF that exports could dip to $28-29 billion in FY23, a reduction of $8.8-9.8 billion against the annual target, which requires immediate discontinuation of export subsidies. photo: file
The caretaker Sindh government has agreed to set up a modern export processing zone on the land of the Pakistan Steel Mills (PSM) under the Special Investment Facilitation Council (SIFC) but the public entity’s Stakeholders Group has expressed concerns over the move, requesting that interim Prime Minister Anwaarul Haq Kakar should review the decision.
The interim federal industries and production ministry in a letter sent to the Sindh chief secretary has sought a written approval for the establishment of a modern export processing zone on the land.
According to sources, during a meeting held in Karachi on December 28, caretaker Sindh Chief Minister Justice (retd) Maqbool Baqar and interim Federal Minister for Industries and Commerce Dr Gohar Ejaz decided to establish a modern export processing zone on the land of the PSM.
The Sindh chief secretary, principal secretary to the interim Sindh CM, federal industries ministry secretary and chairman of the Trading Corporation of Pakistan also participated in this meeting.
In the huddle, the caretaker Sindh chief minister asked the interim federal government to write an official letter to the province seeking its consent for the proposal to set up an export processing zone on the PSM land.
He also assured the interim federal minister that in response to this letter, the caretaker Sindh government would agree to the proposal.
The sources said in this connection, the caretaker interim federal industries and production ministry sent a letter to the interim Sindh government on January 31, 2024, seeking the formal its consent for the move.
An area of more than 10,000 acres has been reserved for the PSM plant at present.
The PSM has been removed from the privatisation list and a plan for its rehabilitation has been given the nod.
Read: Exports remain robust, rise 27% in Jan
However, the Pakistan Steel Mills Corporation (PSMC) Stakeholders Group has expressed its concern over the decision and appealed to the caretaker premier to reconsider the proposal.
PSMC Stakeholders Group Convener Mumrez Khan wrote a letter to the caretaker premier, interim federal industries and production ministry’s additional secretary in-charge, and SIFC secretary, warning that the establishment of a processing zone on the land of the PSM would have disastrous financial consequences for the institution.
He added that this type of zone could be built anywhere in the country, but it would not be possible to relocate the PSM to any other place.
Khan argued that reviving the PSM to provide raw material at competitive prices to the engineering industry and construction sector was essential to bring the country out of the current economic crisis.
He attributed the PSM losing Rs100 million per day because of production losses, which included 80% markup and surcharges, to the decision of not appointing a qualified board of directors comprising of professional experts.
In the letter, the SIFC was also urged not to repeat the mistakes of the previous governments because of which the country’s economy suffered a blow of $15 billion between 2008 and 2023, while the PSM’s losses stood at Rs700 billion, including payments and dues.
The convener further referred to the decision of the Supreme Court on November 18, 2019 that the federal industries ministry could not sell the land of the PSM, and according to the law its premises could only be used for a steel mill or related industries.