Pakistan Steel Mills is another model of how corruption and miss handling of vital national assets were spoiled in recent times, with billions of Pakistan’s tax payers money was put into bonfire of bailout packages. The latest example of misconduct in the country is miserable Petrol Crisis.
PSM was Pakistan’s biggest industrial production unit established back in 1985. The foundation of these gigantic multi steel plants was laid at 40 Km southeast of Karachi on massive 18,200 acres. The land was proportionately divided for various activities, such as plants was developed over 8,070 acres, 200 acres were assigned to setup water reservoir, which was the largest in Asia and additional land was designated for storage of raw and various end products after manufacturing.
Moreover, Pakistan Steel also employed considerable 28,000 people till 1991; the significant thing is that steel mills required 14,000 only at the time. The production capacity was about 1.1 million ton with the expansion scoop upto 3 million tons. The main dignitary behind PSM establishment one was a Russian scientist known as Mikhail Koltokof, from native side involved skillful and spirited Pakistani Professor Dr. Niaz Muhammad and Wahab Siddiqui.
Professor Dr. Niaz Muhammad was the main striving force behind execution of this dream, amid at making Pakistan able to produce substantial amount of steel and iron products for coping up with domestic needs and even producing surplus to export to other countries as well. Dr. Niaz Muhammad was also the man behind training abundance employees of PSM including scientists and engineers.
Pakistan Steel Mills was a profitable well managed organization since its establishment, although was bit overloaded with extra political recruitment of employees time to time. PSM even remained a profitable unit in last Military ruler Pervaiz Musharraf’s regime mainly in years 2001 to 2008.
Nobody could imagine that this country’s largest industrial unit will ever become bankrupt and won’t be able to even pay even its employees’ salaries. The worst time for PSM and its employees started after PPP (Pakistan People’s Party) came into power in 2008. Although, Steel Mills was starting deteriorating in Musharraf’s rule to be fair. Thus, because of overcrowding of useless employees, incompetence of top management, week policies and most significant reason behind PSM collapse was corruption of its top management and affiliated politicians and bureaucrats in the past many years and affluently after 2008 till now.
As from the first day of PSM establishments, many international countries mainly big steel players of the World began dubious activities against this vital national asset operation. Many local organizations and rich people were also found guilty in its bankruptcy. In 2006 while Pervaiz Musharraf was still in command of the country, when the privatization of the Pakistan Steel Mills took place abruptly by passing many rules and regulations.
Saudi Arabia-based Al Tawairqi Group of companies, Russian based Magnitogorsk Iron and Steel Works and local hefty Arif Habib Securities paid nominal amount of Rs 21.6 billion ($362 million), or Rs 16.8 per share mutually. This deal authorized these big firms to take control of Pakistan’s largest steel manufacturing plant.
Criticism on Privatization and termination:
The analysis and apprehensions was stated surfacing as soon as this PSM privatization deal tool placed in 2006. Later, it was considered as the one of the biggest con and ruining of countries biggest industrial unit by experts. Furthermore, Transparency International report, employees, print and electronic media and even civil society also raised their voice against this fraudulent agreement.
Consequence, of this protest against PSM privatization was witnessed soon, when on June, 23 nine member bench of Supreme Court Pakistan found serious irregularities in the process and ruled this privatization decision illogical and moved this case to Council of Common Interests. So, that’s how this privatization deal got terminated later, in the profound interest of the country?
The toughest time for Govt initiated when the mentioned privatization deal got terminated by the apex court. Last, PPP (Pakistan People’s Party) led Govt fueled PSM with Rs 40 billion bailout package in its 5 years term to keep it functioning. And now PML-N pilot federal Govt also recently assigned 18.5 billion bailout packages for Pakistan Steel Mills for financial year 2014-15.
This huge amount was mainly used for paying remaining salaries of PSM employees and starting some sort of manufacturing through purchasing raw material for PSM few operational plants. Moreover, present is Govt also making efforts for boosting production capacity of PSM gradually in the coming few months by this financial aid.
The good news has now starting going off from Pakistan Steel Mills according to latest reports, the production capacity of PSM has touched 45 % out of total capacity at present. This drastic improvement has been seen ever since Govt appointed Major General (Retd) Zaheer Ahmed Khan as CEO, who is in charge of PSM since April 7, 2014. The notable thing is that national steel mill was working at 1.4 % of its total production capability – at the time Major Gen Zaheer took over.
Moreover, the authorities are also claiming that this vital national asset will soon become profitable again in April, 2015 eyeing the present enhancement in its production capacity. This proves that if right people having the will to evolve any sector deployed on right positions, no one can stop Pakistan to progress towards its due place on World’s map.