MPs oppose SIFC’s move to close PSM

ISLAMABAD: A parliamentary panel on Thursday opposed the Special Investment Facilitation Council’s (SIFC) decision to permanently close and scrap Pakistan Steel Mills, advocating for the revival of industrial giant.

The panel highlighted that several of the world’s leading economies have expressed interest in investing billions of dollars to restore the mill.

The National Assembly’s Standing Committee on Industries and Production, chaired by MNA Syed Hafeezuddin, unanimously supported the mill’s revival during its meeting on Thursday. Committee members raised concerns that certain vested interest groups are primarily focused on acquiring the mill’s land, which they see as valuable after the facility and plants are dismantled.

Chairman of the panel said, “The committee is of the view that the mill should continue operating in one way or another.”

Built by the Soviet Union in the 1970s, Pakistan Steel Mills, the country’s largest state-owned industrial facility, has been inactive since June 2015, occupying a vast 19,000-acre site.

MNA Abdul Hakeem Baloch stressed the significance of the mill’s land, warning: “Everybody is eyeing the land. Now, big buildings will be built on the land. This is a serious issue and there should be a well-thought-out decision on it. Don’t make a hasty decision.” Baloch urged that Karachi should not become a “concrete jungle,” voicing his plea against any hurried decisions on the mill’s future.

MNA Naz Baloch also opposed the mill’s closure, emphasizing the need to consider climate change. “It was a profitable entity and a success story. If someone is dreaming of building a housing society on the land, it would be very unfortunate,” she said. MNA Arshad Sahi questioned how a facility that made over Rs9 billion in profits in 2008-09 could fall into losses. He called for efforts to revive the mill, noting its assets are worth nearly Rs900 billion.

However, Minister for Industries and Production Rana Tanveer Hussain argued that the mill has become a ‘liability’ over time. He noted that the SIFC has decided to dispose of the mill’s land, allocating 1,500 acres for special economic zones and handing over the plant and 700 acres of land to the Sindh government. “SIFC has recommended scrapping it, but its dismantling will take four years,” Hussain said, adding that a technical evaluation of the mill is going on amid rising incidents of theft and 305 acres of land encroachment.

Acting Chief Financial Officer Muhammad Arif briefed the committee, revealing that the mill’s real losses have reached Rs234 billion. Minister Hussain asked the CFO how much money the government has pumped in so far. The CFO replied that Rs107 billion has been so far given.

The committee, after reviewing detailed briefings from both the ministry and representatives of PSM, expressed its commitment to ensure that the mill continues to operate and contribute to the national economy. To know the financial and administrative challenges faced by the PSM, particularly those concerning its employees, the committee decided to visit the facility and form a subcommittee. The subcommittee will focus on resolving the critical financial and administrative issues at PSM.

Earlier, the standing committee took a briefing from the Utility Stores Corporation (USC). The MD of the corporation informed the committee that USC is committed to providing quality commodities from reputable, branded companies at subsidised rates. These companies are contractually barred from selling the same items at a lower price than what’s printed on the packaging elsewhere in the country. The USC received approximately Rs1 billion in rebates over the past year. This rebate was taken from Dalda Company.

The MD also raised concerns about taxation, noting that the Federal Board of Revenue (FBR) taxes commodities based on their buying price rather than the subsidized sale price.

The committee acknowledged the issue and decided to call the FBR chairman to its next meeting to address the matter. When MNA Rana Arif asked the MD USC about the corporation’s business plan and the status of a qualified audited report, the MD was unable to provide a satisfactory response.

Later, representatives from the PSM labour union and stakeholder group were invited to the meeting. Mumrez Khan, convener of the PSM Stakeholders Group, told the committee that the mill could be revived and made profitable. He noted that investors from Russia, Europe, Japan, and Korea are interested in investing in the mill, but the government has not pursued these opportunities. Khan also alleged that the Ministry of Industries and Production had misled the SIFC and the prime minister about the mill’s situation. They have called for an investigation into the appointment of non-professional officials, which they believe resulted in costly mistakes and mismanagement at PSM.