ISLAMABAD: Russia has announced a grant of $500 million for reviving the financially troubled Pakistan Steel Mills and also shown willingness to finance $500 million for a 1,000 megawatt regional electricity transmission project.
Federal Secretary for Industries and Production Javed Awan told Express News that the announcement for the mill – which was established by the Russians 30 years ago in Karachi – was made when Prime Minister Yousaf Raza Gilani met with his Russian counterpart Vladimir Putin on the sidelines of the 10th heads of government meeting of the Shanghai Cooperation Organisation (SCO), a regional security grouping.
The two premiers, on the sidelines of the summit, also expressed willingness to speed up work on the proposed Free Trade Agreement and currency swap deal to boost bilateral trade and further strengthen economic ties.
Gilani in his fourth meeting with Putin had a frank and detailed discussion on relations between the two countries in a cordial atmosphere.
Russian Prime Minister Putin said relations between Pakistan and Russia have reached a level, where both the countries were in a position to enhance trade and strengthen ties.
Moreover, Gilani said that Russia was an important country and a source of stability in the region because of its geographical proximity.
The projects
The money earmarked for Pakistan Steel Mills will be spent on repair of machinery and expansion of the steel mill. As a result, its production capacity is expected to increase from 1.1 million tons to 1.5 million tons per annum.
Earlier, Putin had offered Russia’s assistance for enhancing the mill’s production capacity from one million tons to three million tons.
Putin also announced willingness to help finance $500 million for the CASA-1000, a project that envisions building a 1,000-megawatt transmission line from hydropower generators in Kyrgyzstan and Tajikistan to Afghanistan and Pakistan, which are seeking more reliable and cheaper sources of electricity.
The initial agreements call for Tajikistan and Kyrgyzstan to supply an equal amount of electricity to Pakistan, which will receive 70-75 percent of the flow, and to Afghanistan, which will receive 20-25 percent, analysts from the Central Asia-Caucasus Institute told the United Press International.
At about 1,000 miles it would be the biggest regional power supply project in Eurasia, according to United Press International. Nearly 90 percent of its estimated $2 billion cost is to be funded by international finance organizations such as the World Bank and the Islamic Development Bank, with the remaining 10 percent provided by private investors, adds United Press International.
He also offered coal gasification technology for Thar coal reserves and upgrading of Guddu and Muzaffargarh power plants to increase electricity generation to help meet the country’s growing energy needs.
Gilani appreciated Russia’s support for mega projects including CASA-1000.
Prime Minister Gilani called for opening of respective bank branches in both countries to boost trade levels. He said the top officials of their central banks can meet to work on an operational strategy in this regard.
The Russian premier said the inter-ministerial commission’s meeting will be held on December 12, which will take up all subjects of cooperation.
The leasing of Sukhoi commercial aircraft for Pakistan International Airlines was also discussed during the meeting. Putin accepted Gilani’s invitation to visit Pakistan for which dates would be worked out by the respective foreign ministries of the two countries.
With additional input from app
Published in The Express Tribune, November 10th, 2011.
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Why dont we sell the Rental Power projects to the Russians for 1 Bn? wink wink.
@antanu g: to Mirza "...So our priority should be on GOOD GOVERNANCE rather than on any so called system with fancy tags." Now that you have so helpfully decided "our" priority, namely "GOOD GOVERNANCE", now tell us, Great Sage, how do we decide who provides that "GOOD GOVERNANCE"? Perhaps you would like to nominate yourself for the job. Muslims have known for ages, actually a millennium or so, that a caliphate is a very good form of government and a benign caliph is what the doctor ordered for the purpose. But, surprise, surprise, till today they have not been able to install one after the first few. Why do you think it is so? Do enlighten!
@Khan: you agree with my point...a country is as good as its people. First change yourself...even a dictator would surrender to your power. So stop blaming the system.And while agreeing with you about few examples...please let me know does american govt respects the wish of its people? majority is against military adventures but their sentiments are ignored by the so called democratic system and in the process led the US towards worst economic crisis.
@antanu g: I used to think that way too during Musharraf era but there is a huge difference in both systems ... You can get a good dictator but his one mistake can make you suffer for rest of your life (ZIA any one?). In democracy at least you do have a chance to vote the rotten eggs out ... that is whats called Mature democracy ... Ours isn't that's why we have same people and same faces ruling the country and people are not mature enough to vote them out yet, majority would rather sit home on election day and then suffer for coming few years through the hands of those they didn't bother to vote out. We are all human and no one can be perfect but all those countries like Japan, Germany USA, France, India and UK have a mature democracy and that's how they become developed countries not through any dictatorship.
@Mirza: There is no difference between a democracy and tyranny. In a tyranny..a single person makes fool of the massess and in a democracy a group of people do so. So our priority should be on GOOD GOVERNANCE rather than on any so called system with fancy tags.
Many Western democratic country would help a democratic Pakistan not the millitant fanatic Pakistan. Even though the military touts cannot see the difference but the civilized world can see and appreciate the democracy. Even the worst democracy is better than the best dictatorship.
@Adil: and now we are suffering, because of that stupid adventure. . . !!!
By Allah's rehmat Russia has now accepted we are their masters. Russia is now investing because it is scared of us because Pakistan broke Russia into pieces after cold war. Allah Hu Akbar
After chinese, whatever remaining national assets are there will be auctioned off to americans and russians.. great !
The next step should be to privatize Pakistan Steel.
@Hedgefunder: no bady give money without strings attached. what do you thing about USSR help to india in the past...was it string free ..? USSR commanded blind obedience from india in those days in the world affairs...and india obliged.
@Khan: by killing criminals...many lives were saved bu for killing one criminal many lives were slaughtered..so the equation is at par. your logic sans any logic.
@Hasnain: Few years steel supply, for free, i guess !!! The Riussians too would not give money without strings attached !!
@Mohammad Ali Siddiqui: Please read what you wrote earlier .. does it make any sense ? Lets say you appoint a foreign management for an organization... how will that make it profitable and how will they stop thousand of employees from doing nothing but sipping teas? Please explain this with examples.
There is no other solution for all these ailing organizations like PSM, Pak Railways & PIA but just to privatize it .. there are many companies owned by Pakistanis and run by Pakistanis and many of them are owned by single families/persons. For example without naming any brands, Cement & Fabrics. The only reason of its success is, that they are owned privately.
If we privatize Railways, PIA & PSM the management will have stake in it. Currently, any one working in these companies from CEOs to a clerk is only working in it to get their salary every month and nothing else ... they don't care if its in loss or profit. Once privatized the Management will only work for profit of the company and nothing else thus will make sure who ever doesn't work professional, does work or gets fired thus from the CEO to a clerk every single person will work harder and will not waste their whole day sipping teas.
That's half a billion dollars! What do they want in return for this "assistance"?
Another day, another Aid !!!! Keep it up!!! The day will arrive, when it will all dry up !!! Then what will you do???
@Sidiqui. You dont have to see through American prism all the time. You just got to have better relations with Russia, since it is great nation and major player in regional and global politics. Why you are always willing to play proxy, for bigger powers.
Thank you Russia .. I hope we have competent enough government to have stronger bilateral trade with Russia in future. This is how USA should utilize their huge funds they are giving us all the time ... Russia made a single Steel Mill but it stands apart because people can see it from past many decades. US has done a lot more than any other country in helping us out but people can't see that because it was never invested in projects that stays for ever ... one shouldn't be so ungrateful to forget the favors USA has done for us. Our TV anchors and right wing politicians are crying all the time about Drones although it does has killed 20% civilians but one should not forget the criminals it has killed, if they were alive they would have killed many more civilians.
a slap on the faces of doom who kept repeating that no FI is possible in Pakistan...
More money come for eating in pakistan steel mills for PPP govertment ha ha:)
One an optimistic note, despite the critic from people who do not know the full story including me, we should positively welcome this massive change for our steel mill in Pakistan. I would like to thank Russia for this grant. We just hope there are no strings attached and quality inspectors are be paid commissions on top to ensure funds are properly allocated without wastage or externalities.
We must enhance our relations with Russian to maintain a balance with the US.
I would suggest that government of Pakistan should think to handover the charge of Pakistan Steel Mills to Russian Management so that Russians should not only look after the day to day problems of PSM but at the same time should also run PSM into profit which should ultimately run money for the country.
All the Pakistani Chiefs appointed by the government were either incompetent or corrupt due to which the country has suffered heavy financial losses.
At the time when grant of US$.500 million is received by our government, all negotiations with the Russian Management should be completed in a way that when actually the grant is in Pakistan’s hand, the same day Russian Management should start working to look after the affairs of PSM.
To bring to a point when the losses are converted into profits, the government should also ban the PSM union as it has become too much politicized.
The PSM should limit the activities of its union workers so that no more political activity should take place, except for the welfare of PSM workers.
Great, Russia should wasatch how the money is spent, otherwise its a great gesture on Russia's part.
How will Russia give Pakistan this money? Will it simply be a case of forgiving an old loan to the tune of 500 million or will it be a new inflow of funds into Pakistan?
Stop these foolish things to be published, trust on you and your nations abilities includes the peoples and functioneers
hahaha, pakistanis are really lucky. they were born with a silver or golden spoon- people are making queue to give aid. I remember one Amitabh song from Mukkadar ka Sikandar - "Jiska Koi Nahi Uska to Khuda Hai Yaaro" - Now US going, russia is coming to give aid (by the way Pakistan has defeated Russia in Afghanistan).China already higher/deepr friend, India also MFN. that why, it is so lucky (still it behaves Yucky).
KGB conspiracy to weaken Pakistan.
Earlier, Putin had offered Russia’s assistance for the enhancement of the production capacity of the Pakistan Steel Mills by increasing its production from the current one million tonnes to three million tonnes. - Author
It has nothing to do with the "enhancement of the production capacity" ... It has everything to do with the incompetent, insincere and inept people working there ... starting from top till the lowest tier !!!!
Russia please stop this grant immediately...this money will go in the waste...as these politicans will eat this money...dont give money to this government..please...stop this money...
Privatize it...
So where did all other offers ended ? Did we not agree on commission ?