Russia to use existing fixtures for new mill
The Russian government has offered Pakistan to set up a new steel mill by using existing steel fixtures of the ailing Pakistan Steel Mills (PSM).
Sources said that the Ministry of Industries and Production, in a recent meeting of the Economic Coordination Committee (ECC), informed participants that the liquidation process of PSM would be completed by the end of June next year.
The economic decision-making body was further apprised that a new board of PSM had been constituted and its land was not being leased out. Moreover, surplus staff and daily-wage earners were being laid off and only core staff was being retained.
The ECC was told that the Russian government had shown interest in setting up a new steel mill by using the existing steel fixtures, subject to findings of a technical committee that are due during the current month, which would outline the way forward.
The ECC reviewed the progress highlighted by the Industries and Production Division. The loss-making PSM has been a matter of concern for every government.
During the earlier tenure of Pakistan Muslim League-Nawaz (PML-N) government, PSM achieved a 33% production mark but then the government suddenly cut its gas supply, which led to complete closure of the mill in 2015.
Then the Pakistan Tehreek-e-Insaf (PTI) government came to power and it tried to revive the steel mill. It also engaged Chinese and Russian governments to rejuvenate PSM.
The PTI administration was more inclined towards China in efforts for PSM's revival but the plan could not materialise.
Now, the Shehbaz Sharif-led federal government has decided to close the financially struggling PSM and grant Sindh province permission to utilise its land for general industrial purposes.
Additionally, the government is considering establishing a new steel mill in partnership with the Sindh government at the PSM site by engaging the Russian government. These decisions have been supported by the Special Investment Facilitation Council (SIFC).
The Shehbaz Sharif administration has instructed the Ministry of Industries and Production to present a plan, including a proposal to set up a new steel mill on PSM land.
The government has also agreed to allow the Sindh government to use PSM land for general industrial purposes by ensuring the transfer of ownership for the remaining 1,683 acres of the defunct industrial unit.
The Ministry of Industries and Production has been tasked with clearing the encroached PSM land and regaining its possession. A committee will be formed to supervise the process.
The ministry is also expected to provide a detailed plan for establishing an export processing zone or a special economic zone across the entire PSM site.
The SIFC has instructed the ministry to earmark land for the establishment of a new steel mill in collaboration with the Sindh government.
Officials said that a committee was formed on April 24, 2024 under the chairmanship of then secretary of industries to deliberate on the future of PSM. However, Prime Minister Shehbaz Sharif addressed the issue at a high-level meeting and decided to shut down the loss-making entity by repurposing its land for other industrial uses.
Now, the government expects Russia to be engaged to set up the new steel mill using the existing fixtures of PSM. However, it depends on the report of the technical committee, sources added.