The federal government has decided to shut down Pakistan Steel Mills, a state-owned enterprise that has been incurring heavy losses for years.
In a statement, Secretary of Industry and Production said that the Sindh government has been offered to take over 700 acres of the total 19,000 acres land of the PSM and establish its own steel plant on the site.
Last year, the secretary claimed, they found out that there was no buyer for the Pakistan Steel Mills. “Apart from 700 acres, the land will be used for industrial purposes”, he added.
Meanwhile, Chief Financial Officer Arif Sheikh claimed that the federal government has decided to close down PSM due to its poor performance and financial losses.
The mill, which was established in 1974, has been facing financial difficulties for the past decade. The CFO claimed that the volume of PSM employees’ annual salary is Rs3.1 billion and in the last 10 years, the government has paid Rs32 billion in salaries.
Additionally, the mill has consumed Rs7 billion worth of gas in the last decade, Arif said, blaming ‘politically-influenced recruitment and permanent staffing’ for sinking of the state-owned enterprise.
In 2010, the CFO added, the government decided to regularise the employment of 4,500 employees, which resulted in an additional cost of Rs2 billion.
The Sindh government has now announced plans to establish a new steel plant to replace the old one, the Secretary of Industry and Production. Moreover, the federal government has also decided to allocate 4,000 acres of land from the Pakistan Steel Mills site to special economic zones.
The assets of Pakistan Steel amount to Rs 83 billion, while during the fiscal year 2023-24, it faced a loss of Rs 6 million per hour due to the constant presence of accounts.
It is worth mentioning that the foundation of Pakistan Steel was laid by former Prime Minister Zulfikar Ali Bhutto on December 30, 1973.
The design of the Pakistan Steel Mills, which has the capacity to produce 2.2 million tons of steel, was also given a 12% shareholding in 2009.
