Pakistan's metallurgy groping in the dark

Controversial government policy towards sick Pakistan Steel Mills (PSM) complicates financial and operational problems as production is virtually nil. While the government has not decided whether to privatize or restructure the sector, the gap between domestic steel demand and supply continues to widen, leading to an increase in imports.

Strong demand in the civil engineering, automotive, engineering and power generation industries projected strong growth in steel demand. The privatization was reportedly postponed for about a year and the decision was made to revitalize the factories in the first place.

The government has asked the Asian Development Bank to provide $ 20 million in technical assistance for the restructuring of selected state-owned enterprises, but it will only be available during the next fiscal year. Due to its importance, the steel sector has enjoyed the maximum patronage and support of various governments in many countries, but unfortunately not in Pakistan.

Over the past 10 years, Russia, China and Western countries have made comprehensive proposals to the government to turn PSM into a modern and efficient organization, where the latest steelmaking technologies would operate, and even offered equity participation.

But alas, subsequent governments have failed to act to achieve any tangible physical progress. Russia again offered $ 1 billion in August 2013 to revive the Mills, but there was no government response. In addition, PSM has negative equity and is unable to repay existing loans or obtain additional working capital.