Russia offers funds to revive Pakistan Steel Mills

Published: August 1, 2013
SHARES
Email
In the first phase the capacity of the Steel Mills will be, at first, rehabilitated and then upgraded to 1.5 million tons a year. In the second phase, production capacity will be enhanced up to three million tons a year. PHOTO: FILE

In the first phase the capacity of the Steel Mills will be, at first, rehabilitated and then upgraded to 1.5 million tons a year. In the second phase, production capacity will be enhanced up to three million tons a year. PHOTO: FILE

ISLAMABAD: 

Russia offered $1 billion financial and technical assistance for rehabilitation and upgrading Pakistan Steel Mills (PSM), according to a statement issued by Board of Investment.

Sergey Abuditze, deputy general director for development of JSC Technopromexport – Russian-based engineering company that builds energy facilities in Russia and abroad – announced the assistance while calling on the Board of Investment Chairman Muhammad Zubair on Thursday.

The BOI chairman also discussed the two phases regarding of PSM where in the first phase the capacity of the Pakistan Steel Mills will be, at first, rehabilitated and then upgraded to 1.5 million tons a year. In the second phase, production capacity will be enhanced up to three million tons a year.

Abuditze said that Russia will provide financial assistance worth $1 billion for the project. This matter has received positive response and is presently under active consideration at the highest level on the Russian side.

The Russian-based company discussed the project of converting Muzaffargarh thermal power station to coal and establishing a 600-megawatt coal-fired power plant at Jamshoro.

Abuditze apprised the BOI chairman that Technopromexport (TPE) is one of the largest companies in Russia, specialising in setting up electric power stations. Discussing previous projects by built by the company in Pakistan, Abuditze said that TPE’s project portfolio in Pakistan includes installing units 1, 2 and 3 at the 660MW-Muzaffargarh plant between 1993-95 and setting up the 220MW-Guddu plant in 1981 with the financial assistance of Soviet Union.

The Moscow-based firm is keen to undertake projects in Pakistan, and can also assist them in obtaining loans and financing some projects.

Abuditze further went on to say that in June 2010, a TPE team visited Water and Power Development Authority and Pakistan Electric Power Company where the company was requested for assistance in rehabilitation of three Russian-made units at the Muzaffargarh plant.

A “framework cooperation agreement’ between JSC Technopromexport and Genco Holding Company was agreed and funding of 500 million Euros for rehabilitating and converting the Muzaffargarh plant.

BOI chairman Zubair also pointed the TPE towards a potential project where the government may need their assistance such as the construction of new coal-based unit with a capacity of 500-600MW.

While talking about the financial and technical assistance of rehabilitation/up-gradation of the PSM, he appreciated the role of the Russian government for assisting providing $500 million on a government-to-government basis.

Published in The Express Tribune, August 2nd, 2013.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (11)

  • Sajjad
    Aug 1, 2013 - 11:37PM

    I am amazed how every nation from around the world is assisting Pakistan to recover. Thanks everyone out there <3

    Recommend

  • Gingo
    Aug 1, 2013 - 11:43PM

    Russia helped Pakistan set up the Steel Mill. And now the very same Russians are again ready to help us. I think we shouldn’t rebuke this offer of theirs

    Recommend

  • Parvez
    Aug 2, 2013 - 12:01AM

    Privatise it …………… is the only sensible solution because like PIA its problems are not technical but political.

    Recommend

  • Jameel ur Rasheed
    Aug 2, 2013 - 12:36AM

    Problem with steel mill is the gigantic work force which has been recruited on political motives. Fire them all and the mill will be in profits again!!

    Recommend

  • Syed
    Aug 2, 2013 - 1:13AM

    This is the steel mill which was given to our genius Civil Marshal Law Administrator by the Russians as a prelude to destroy the complete existing industrial set up in Pakistan by Nationalizing them. The performance of Steel Mill has been controversial since its existence and many a times different governments attempted to de- nationalize it,but personal interest of Sharifs didn’t let it happen through Supreme Court. Now it would be the best to hand over this mill back to Russians to run it. It is beyond the capabilties and character strength of our political goverments to run mills owned by the state honestly and profitably and pay the devidents to the country.

    Recommend

  • AbdulQadir
    Aug 2, 2013 - 5:01AM

    It ought to be like ptcl privatisation … public private partnership. production enhancment, efficient working and remaining compitative in market by products and quality is way beyond for a goverment. simply b/c its not thier work to do thts “business”.

    Recommend

  • A Pakistani
    Aug 2, 2013 - 5:28AM

    The whole world trusts the tireless & sincere leadership of PMLN government and now provides economic assistance after the general elections.
    Pakistan will soon be back on track after a decade of bad governance & loot culture of dictator Musharraf (when he tried to hush up the covert sale of Steel Mills at throw away price) and PPP (employment to thousands of Jiyalas and kickbacks in deals).
    It is not very surprising that the dictator’s Prime Minister Shaukat Aziz is now doing the job of British-Indian steel tycoon Laxmi Mittal whom he tried to gift the Steel Mills and the Supreme Court obstructed the broad daylight theft in 2006.
    We all foresee the technical, financial and organisational restructuring of Pakistan Steel Mills so that it is no more a burden on taxpayers of Pakistan.

    Recommend

  • Ali
    Aug 2, 2013 - 7:03AM

    Shame……….still ALL WEATHER FRIEND not giving any offer, where is sweeter than honey and deeper than ocean?

    Recommend

  • Faisal
    Aug 2, 2013 - 11:13AM

    Why is government keen to continue running a loss making entity? Why not privatize it? If that is not possible, give good compensation package to the employees and shut it down. This will be beneficial in the long run as govt will be free from having to arrange money periodically to bail out Pak Steel.

    Recommend

  • M.H. Zafar
    Aug 17, 2013 - 9:58PM

    Toronto, Ontario, Canada

    Recommend

  • Syed Akber Zaidi, Ex-Employee
    Aug 24, 2013 - 12:15PM

    AoA, I Syed Akber Zaidi, was retired on 30th, December 2011, after about 41years,
    and I know him the point to point situation as well as all conditions very well deeply. That, who’s & how many persons are involved in corruption & doing till-date. All to all are present in PAKSTEEL, but management is still silent.
    Privatization of its Mills was my primary aim, specially after Chairman ship of Lt.General. Qayyum.
    In present situation, as per decision of newly elected Priminister, Mian Mohammad Nawaz Sharif, that privatization is much better of its Mills than running in Government custody. But before its privatization, accountability and
    Strictly disciplinary action must be taken against external and specially internal small but most corrupted persons, presently they are all working in it’s Mills as employees
    Regards.Recommend

More in Business