A total of seventeen companies have expressed interest in partnering with the Pakistani government to run Pakistan Steel Mills (PSM) on a public-private partnership, Arab News reported.
The foreign companies that have shown a willingness to partner with Pakistan in this regard include six Russian firms including the METPROM Group, three Chinese companies including the Metallurgical Corporation of China (MCC), four Ukrainian entities including the Ukrainian National Foreign Economic Corporation, and one American firm.
According to the recent statements of the Minister for Industries, Hammad Azhar, the government plans to run the state-owned PSM on a public-private partnership model, with Pakistan as the majority shareholder.
Once responsible for almost half of the country’s steel needs, the state-owned Pakistan Steel Mills in Karachi, designed and funded by the Soviet Union in the 1970s, now contributes Rs. 15-20 billion in annual losses to the national exchequer and has been dormant since 2015.
According to Pakistani government officials, PSM infrastructure has the annual capacity of expanding production to three million tonnes of cold and hot-rolled steel.
However, faulty policies and failure to upgrade relevant technology and machinery caused production to drop by as much as 92 percent in the past decade. The dip in demand brought about by the 2008 recession also did not do any favors to the mill, and consumers turned to cheaper imported steel products, thereby further denting PSM’s revenues.
The incumbent government, however, seems bent on turning the loss-making entity around and has also begun to take some highly unpopular decisions, starting with laying off of almost half the workforce of PSM.
However, the government also believes that once PSM begins to operate at full capacity, it will lead to employment generation. Once the company is performing efficiently, it will not only fulfill local steel demand but would also provide opportunities for Pakistan to export steel products.
Now, the government has caught the interest of several local and international firms in this pursuit of reviving the 19,000-acre facility.