Pakistan Steel Mills'' production on Thursday came to a complete halt because of a shutdown of its single operational Blast Furnace (BS) due to a leakage. Sources told Business Recorder that the government-owned country''s largest steel producing plant is again on the verge of collapse as its two major production units - Steel Making Department (SMD) and Iron Making Department (IMD) - stopped working on Thursday due to a major fault.
Out of two Blast Furnaces, PSM''s Blast Furnace-II is already out of order for one year and a heavy investment is required to bring it back to a working condition. While BF-I was also facing frequent problems, it was one month ago that it remained non-functional for two weeks. PSM faced a 13-day production break in the first week of August 2014 as single operational BF-I stopped working due to a major fault in its coolers.
According to sources, after the August 2014 incident, the management did not take serious measures for proper repair and maintenance of BF-I, its complacency led to another mishap on Thursday at 8:15 am. The furnace stopped working with a powerful blast; and hot molten iron was dispersed out from the BF-I, affecting the nearby plant area. The functioning of steel converter of Steel Making Plant had already come to a halt on Wednesday night due to a leakage.
"SMD problem is not likely to resolve in less than a week but BF-I repair will take some time and in the meantime PSM production will remain suspended," they said. PSM spokesman Shazim Akhtar also confirmed that the production of Pakistan Steel has come to a complete halt after the incident. He said no injury was reporterd in the incident and that the CEO personally visited the BF-I to monitor the maintenance work.
Asked about the estimated time for repair, he said "definitely it''s a major fault and will take some time to restore the production." According to him, iron-making and steel-making plant has completely stopped production; however, other associated plants are still operational.
In April this year, the Economic Co-ordination Committee of the cabinet approved a Financial Restructuring Package or Bailout Package amounting to Rs 18.5 billion for PSM; so far, over Rs 12 billion has been released to it for payment of salaries and procurement of raw material. Sources said that despite getting over Rs 12 billion from the federal government, the management is not making arrangements for repair of plant and only focusing on enhancing the mills'' production. "Since last few years, no proper maintenance of the plant has been carried out by the management, while capital and planned repair work has also been neglected, which is resulting in these types of incidents," they added.
They said that concerned staff of BF-1 and steel-making plant have several times informed the management about dilapidated conditions of plants, but the management never took any serious steps in this regard. "This is a clear negligence of higher authorities and top officials, who have been vociferously claiming that PSM is viable and can become a profitable entity after a bailout package from the government, without mentioning the woeful state of plants, which are over 30-year-old and need major capital maintenance to become profitable," they added.
PSM production was less than 5 percent in April this year; however, with the release of bailout package amount and the arrival of raw materials in July 2014, PSM production improved considerably. PSM official claimed that PSM achieved a 25 percent production in September and was very close to achieve the production targets of 40 percent for October 2014. With the current incidents of BF-I and SMD, PSM is likely to miss the production target for October.
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