ISLAMABAD: Government has decided to shut down Pakistan Steel Mills (PSM), state-owned enterprise that has been incurring heavy losses for years. In statement, Secretary of Industry and Production said that Sindh government has been offered to take over 700 acres of total 19,000 acres land of PSM and establish its own steel plant on site. Last year, Secretary claimed, they found out that there was no buyer for Pakistan Steel Mills. “Apart from 700 acres, land will be used for industrial purposes”, he added.

Meanwhile, Chief Financial Officer Arif Sheikh claimed that government has decided to close down PSM due to its poor performance and financial losses. Mill, which was established in 1974, has been facing financial difficulties for past decade. CFO claimed that volume of PSM employees’ annual salary is Rs 3.1 billion and in last 10 years, government has paid Rs 32 billion in salaries. Additionally, mill has consumed Rs7 billion worth of gas in last decade, Arif said, blaming ‘politically-influenced recruitment and permanent staffing’ for sinking of state-owned enterprise. In 2010, CFO added, government decided to regularise employment of 4,500 employees, which resulted in an additional cost of Rs 2 billion.

Sindh government has now announced plans to establish new steel plant to replace old one, Secretary of Industry and Production. Moreover, federal government has also decided to allocate 4,000 acres of land from Pakistan Steel Mills site to special economic zones. Earlier, it was reported that Ministry of Industries and Production directed authorities of Pakistan Steel Mills to discontinue supply of gas to steel plant, effectively rendering revival efforts of Pakistan Steel Mills futile.

According to notification issued by Ministry of Industries and Production, chief executive officer of PSM has been instructed to halt supply of gas to Pakistan Steel plant. Pakistan Steel had estimated losses of Rs 22.4 billion as of June 30, 2023, while gas obligations reached Rs 33.5 billion. Assets of Pakistan Steel amount to Rs 83 billion, while during fiscal year 2023-24, it faced loss of Rs 6 million per hour due to constant presence of accounts.