Steel producers urge govt to take note of smuggling during Eid holidays

The Pakistan Association of Large Steels Producers (PALSP) appealed to the government on Sunday to take pre-emptive measures to block the smuggling of steel from Iran during the Eid holidays.

In a statement, the steel producers maintained that they were getting frantic messages from Balochistan-based steel industry about “over 25000 MT rebars & steel materials have been dumped across the Panjgoor (Kuwak) border to smuggle it during the upcoming Eid holidays".

Last year, huge quantities of steel from Iran were smuggled during the Eid holidays with the connivance of officials and their collaborators, the PALSP maintained.

It said the industry was terrified of this peril because official/ Eid holidays were availed to smuggle huge consignments and dump the same in big purpose-built stores in Balochistan. "As a standard modus operandi, the perpetrators of this organized crime of smuggling suspend smuggling activity for days or sometimes for weeks to defuse pressure, when authorities start (pseudo) ‘crackdowns’," the association stated.

During this time, the previously amassed stocks dumped at big godowns are released.

"The quantum of smuggled steel products is so huge that the domestic steel industry is almost wiped out near boarder areas," the statement noted, adding that the inflow of steel in such a large quantity was promoting and fueling the undocumented sector and systematically killing the tax paying legitimate industry of the country.

The state authorities need to trace the goods once they leave Customs checkposts and see where they end up to curb smuggling.

"According to the government's official figures, during February 2024, over 22,000 MT of steel material was dumped from Iran via a land route which includes steel slabs, steel bars, steel angles, sections, pipes, and plates among other things. The export of scrap from Iran to other countries is completely banned, however, unfortunately, Pakistan’s Customs authorities declare it as scrap. It is noteworthy that in the general market the price of re-rollable is $500-$520. Whereas, these materials are assessed at $380 - $420 at border by Customs authorities (Taftan mainly). The incentive to smuggle is so big that despite giving ‘share’ to all perpetrators the smuggled/ mis-declared/ under-invoiced steel is available across the country at significantly low prices," the PALSP maintained.

Read Smuggled steel infiltrating Pakistan

It noted that smuggling had become an existential threat to the domestic steel industry, alleging the authorities mostly pay lip service to it. "To great disappointment of the steel industry, as mostly reported in media, the efforts of the Government are primarily focused on smuggling of sugar, fertilizer as well as wheat."

The association criticized the government for "ignoring" steel smuggling and doing nothing to stop it.

As per the statement, "The issue of smuggling was taken up last year in Senate Standing Committee on Finance and Revenue and it was reported in leading English newspapers. During the meeting, it was disclosed that there are fixed ‘rates’ for trucks of smuggled goods ranging from RsRs500,000 to Rs600,000, whereas between Rs100,000 and Rs300,000 was being ‘charged’ for clearance at each checkpoint – with impunity," the PALSP stated.

The former prime minister, Anwaar-ul-Haq Kakar, who was a senator at that time raised his voice in the meeting, took notice of the situation, and constituted an inter-agency committee to prepare a multi-pronged strategy to overcome smuggling when he became the PM, the steel producers noted.

"Also, a massive crackdown/operation was launched to combat smuggling and steel smuggling was successfully stopped for few months during the care-taker regime. To our great disappointment, smuggling resumed with full might from start of 2024 again," they further stated.

The producers maintained that the Inflow of this illegally brought material was killing the demand for steel in Punjab, and eventually disturbing the entire domestic steel market.

One of the factors responsible for the continuation of smuggling is the (deliberate) absence of weighting bridges/scanners/ latest gadgets at many border checkposts. All this provides a perfect ‘opportunity’ to the perpetrators of smuggling to continue commit the crime with impunity.

Despite some reports, there is no mechanism to share information on goods being exported or imported from and to Iran. It seems the exchange of information is not being encouraged/allowed by the entrenched mafias.

To put a complete end to this organized crime of smuggling PALSP demands the government to allow the import of steel only through sea routes to halt the smuggling of steel from Iran & through Afghanistan. This will help the government to utilize the same manpower to stop the smuggling of wheat, sugar, and fertilizers.