PSM revival plan

The recent endeavours of the Sindh government to revive the Pakistan Steel Mills (PSM) are raising eyebrows and concerns, particularly in light of the federal government's ongoing commitment to privatisation as a means to achieve macroeconomic stability. While the federal government did allow Sindh to investigate reopening the mill under a public-private partnership model, at the time it appeared unlikely that a feasible deal could be found. Critics of the Sindh government's plan say that it is still not feasible, and Sindh's efforts are not motivated by what is in the country's interest, but in the PPP's. Keep in mind that the party often credits its founder, former prime minister Zulfikar Ali Bhutto, with setting up the mill, and that job losses caused by the mill's closure will hit Karachi the hardest.

Unfortunately, investing in reviving the mill is fast becoming a matter of cutting of one's nose to spite their face, in no small part because China can provide a ready supply of better, cheaper steel, and even if the mill itself were made fully operational, fuel costs alone would lead to a new circular debt crisis. While it is certainly desirable for the country to have a large steel mill, there is a reason that private sector interest in buying PSM or setting up a similar-sized mill has been tepid, at best - such a mill is not feasible. Also, the proposed Russian assistance is almost entirely related to modernisation, when the mill's real problem has always been mismanagement and bloated staff due to political patronage.

Investing in a historically failing enterprise detracts from addressing more pertinent issues such as job creation, education and healthcare. Instead of investing resources into a mill that has failed to prove its worth over time, the Sindh government should consider leveraging those resources towards fostering a competitive steel market by attracting private investment. This would also create new jobs for steelworkers, potentially creating new opportunities for laid-off PSM workers.