Protest: Gas suspension shuts down steel mill operations

SSGC reduced pressure in June, production capacity falls to zero


Our Correspondent July 07, 2015
SSGC reduced pressure in June, production capacity falls to zero PHOTO: REUTERS

KARACHI: The troubled Pakistan Steel Mills (PSM) on Tuesday said suspension of gas to its plant has caused a complete shutdown of its manufacturing operations, which will badly damage the machinery.

In a release, the company said that it started on June 10, 2015 when Sui Southern Gas Company (SSGC) reduced the gas pressure that affected the production of PSM and ultimately brought it down to zero percent production capacity.

It is pertinent to mention here that during March and April 2015, when the production was at its peak, gas pressure was suddenly reduced bringing production from 65% capacity utilisation to a very low level, it added.

The release said that it is not understood as to why this treatment is being meted now when the same situation regarding payment of bills existed during last six years but never was gas pressure reduced to such a level.

It is strange that a closed plant has been brought from zero production in April, 2014 to an average of 30% capacity production in the last six to eight months with a government bailout package. However, now, after reaching as high as 65% production (CAPU) in March, 2015, gas pressure reduction has hindered the improvement. The release stated that the same situation occurred in January, 2015 when 50% production was achieved before gas pressure was reduced.

The release raised the question that gas pressure is being used as a ‘tool’ to prevent Pakistan Steel from achieving higher production capacity targets and for helping importers to flood Pakistani market with imported steel. It added that an attempt was being made to deprive the country of this asset.

Earlier, PSM CEO Major General (retired) Zaheer Ahmed Khan met Privatisation Commission Chairman Zubair Ahmed, Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi and Minister of State and Chairman BoI/SSGC Miftah Ismail to resolve the matter.

“Subsequently, an agreement was reached to pay the current gas bill from next month. It was agreed that the gas will be restored immediately from July 6, 2015, but the same has not been done,” it said.

This problem has put PSM’s blast furnaces, brick/lime kilns and power plant boilers at huge risk of damage, which will cause irreparable loss putting the plant out of operation for years.

“The PSM management requests the government, especially Finance Minister Ishaq Dar, to intervene and help in resolving the issue,” it added.

Published in The Express Tribune, July 8th,  2015.

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

Our Publications

COMMENTS (3)

ziaurrehman | 5 years ago | Reply Pmln has successfully revived PSM! !
unbelievable | 5 years ago | Reply They don't pay their gas bill and are upset when the gas supply is shut off? From my perspective the supplier should have cut off gas six years ago when the Steel Company stopped paying for gas. . . Steel production is an energy intensive business ... in this case it hasn't been profitable for a very long time even though it doesn't pay for energy which is one of the top expenditures in making Steel. If you can't make a profit when your not paying for one of your major cost then your never going to make a profit --- this business deserves to be shuttered --- it's another PIA.
VIEW MORE COMMENTS
Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ