BETTER sense prevailed at last with the government signing a protocol with the Russian Federation aimed at restarting and expanding steel production in the country and marking a new chapter in Pak-Russian cooperation.
Special Assistant to Prime Minister Haroon Akhtar Khan, who witnessed the signing ceremony at Moscow, remarked that reviving the PSM with Russia’s support reflects our shared history and commitment to a stronger industrial future.
The development is indicative of a refreshing change in the bureaucratic and policy-making circles that were previously bent upon disposal of previous assets of the Mills and wind it down for ever. The agreement has been signed following an understanding between the two countries in May this year to establish a new state-of-the-art steel mills in Karachi. The PML(N) Government deserves credit for moving quickly towards realization of this understanding as the Special Assistant to the Prime Minister was dispatched to Moscow to explore possibilities of revival of the mills, which is closed since June 2015. In fact, closure of this national institution of vital significance is a dark spot on governance as PSM was allowed to rot despite the fact that the role and significance of steels has not diminished and it will continue dominating the economic activities. It is all the more regrettable that instead of taking required measures to address issues that rendered the otherwise profit-making institutions into loss incurring entity, the successive governments, for unknown reasons, preferred trying the privatization path, ultimately deciding to close it for good and utilize its vast land for other purposes. The PSM, originally built with the assistance of the Soviet Union in 1971 not only served as a symbol of Pakistan-Russia relations but also had a cumulative profit of Rs9.54 billion up to financial year 2007-08 when it was headed by professional people. However, over the next 10 years, its losses continued to swell, reaching Rs200 billion in 2018.
Reasons behind the failure of this vital institution are known to all – political interference in its working, induction of thousands of unproductive staff, rampant corruption, high cost of production and global recession besides inability of the successive governments to move towards modernization and expansion of its production capacity. It is an open secret that successive governments and their political allies instead of implementing plans to get rid of unnecessary staff, inducted more on political considerations, therefore, bear the blame for downfall of the Mills. Similarly, they failed to conceive or introduce plans for restructuring of the institution, elimination of corruption and transparency in its operations. What a shame that non-supply of gas played a major role in bringing the Mills down but no sincere or worthwhile efforts were made by any government to address the challenge. It is also a matter of record that past governments of PPP, PML(N) and Shaukat Aziz could not formulate any plan for revival of the Mills and instead pursued abortive privatization processes. One must appreciate the PTI Government for initiating plans for revival of the institution, which are now expected to bear fruits. The Russian side has long been offering cooperation revival and expansion of the Steel Mills and signing of the protocol revives hopes for the purpose. While welcoming the moves towards revival of the Pakistan Steel Mills, one hopes the authorities concerned must have addressed the causes that made a profit-earning organization into loss incurring one. Technological issues must also be examined and addressed properly ensuring that the new Mills has the latest technology, is cost efficient, requires minimal manpower and has the potential for expansion, if needed. Previous investment is gone and the fresh plans should ensure the new investment helps realize intended benefits. The new project is also important in the sense that it will help consolidate relations with the Russian Federation.
