Pakistan Steel (PS) is not selling its products in a transparent way and is unnecessarily delaying rise in the prices of billets for reasons best known to it, says Transparency International of Pakistan (TIP).
According to sources, Pakistan Steel is facing constant allegations of non-transparency in its sales procedure for its products, especially billets, which have attractive demand in the market due to shortage. PS dealers are also getting about Rs 4,000-5,000 per ton premium on the sale of billets, as PS billets are much cheaper than imported billets.
Sources said that four weeks ago a Peshawar-based re-rolling miller, Frontier Foundry, had sent some documentary evidence to Prime Minister Yousaf Raza Gillani and other officials of federal government, in which he had accused PS of favouring a private re-rolling mill and selling the billets in non-transparent way.
In another attempt, Transparency International Pakistan (TIP) has also accused the PS of not fulfilling the transparent procedure for the sale of MS billets. Some PS officials are favouring a company by supplying and allocating extraordinary quantity of billets. As a result, other dealers and re-rolling mills are deprived of getting billets. Recently, Adil Gillani, Chairman, TIP, wrote a letter to PS Chairman Mueen Aftab and asked about the nontransparent sale of billets, terming it a violation of Memorandum of Understanding (MOU) signed between PS and TIP.
"The system of sale of products, especially MS billets, is still not returned to the previous transparent procedure," TIP chief said in the letter. The letter said that Pakistan Steel had not agreed to TIP recommendations that dealers shall not be allocated any quota of billets, and sale price of billets should be increased to bring at par with market price.
The increase in the prices would add to Pakistan Steels profit by Rs 4500 to 5000 per ton, and equitable allocation to all rolling mills according to their respective production capacities shall be made, to bring in transparency in Pakistan Steel sale procedures, the letter said.
For the documentary evidence of nontransparent allocation of billets, TIP gave reference of NOR of 24th February 2009 taken from Pakistan Steel website. The NOR showed the unequal distribution of allocation, to Abbas group of about 50 percent of total production, out of 4,400 tons, and all other rolling mills allotted only 31.9 percent of the total production. Remaining 18 percent has been allocated to traders.
"Transparency International will welcome PS managers to have a meeting with us to clarify the current system, as you have suggested that the present system of product allocation by Pakistan Steel is transparent and is in the interest of Pakistan Steel," said TIP letter.
Meanwhile, talking with Business Recorder, Riaz Laljee, chairman of Abbas Steel, rejected TIP allegations and claimed that Abbas Steel itself is facing several difficulties in acquiring billets from PS. He said that recently Abbas Groups thousands of tons Delivery Orders were pending. "Therefore, we have sent some letters and reminders to PS regarding huge production losses due to the non-availability of billets".
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