M/s Tuwairqi Steel Mills Limited (TSML) has reportedly approached Prime Minister's Adviser Abdul Razak Dawood, to seek his help to get feedstock gas at cheaper rates to strike a deal with CEINA Group, well-informed sources in Ministry of Industries and Production told Business Recorder. TSML team headed by its Project Director Zaigham Adil Rizvi has spent two consecutive days in Islamabad to convince Abdul Razak Dawood and his team that the project faced discrimination during the previous government.
According to a letter written by the project director, almost all the queries/questions of PM's Adviser have been answered with the support of the relevant papers/documentary evidence. "Project needs an unequivocal support from the GoP regarding application of a relevant tariff of the feedstock gas, for its commercial viability. It would be in line with the undertakings of the GoP stipulated in the MoU and in consonance with the recommendations made by OGRA," Rizvi said.
TSML had made several attempts to get feedstock gas at cheaper rates citing an MoU but the then-cabinet refused to give any concession to the project by giving different justifications. There were apprehensions in the PML-N government that in case of extending concessions to this project, other stakeholders would approach the courts and the case was fit for NAB's probe.
"We understood that infrastructural nature Greenfield projects like TSML essentially need encouragement from the government. Thus a holistic view is imperative, as the revival of the project has tremendous econometric/collateral benefits for the country," he said. TSML maintains that a complete revival of the steel sector of Pakistan is essential through a fully integrated steel complex (state-of-the-art) with a capacity of 1.28 MTPA extendable to 1.5 MTPA. On completion of the backward integration of TSML (with 100% indigenous raw material), the project can produce semi-finished/finished steel products at international quality standards predominantly for phenomenal import substitution (may go upto $.1.000 billion per annum) and ultimately almost fully meeting Pakistan's strategic needs.
The Project Director further claimed that besides restoration of jobs for around 1100 persons who became jobless because of the 'shut-down' of the DRI plant, the forward and backward integration has the potential of generating job opportunities for another 5000 professionals/skilled workers/workforce. As such, it's a project both of Human Resource Development (HRD) and Natural Resource Development (NRD), a dire need of the country.
He further stated that as far as the revenues/savings for the GoP are concerned, an analysis done over a period of ten years reveals that government tentatively will have a cumulative gain of around $300 million (around Rs 40 billion) from this project alone. The indirect advantages to the economy and employment generation evidently would be far more pronounced than the direct advantages. He said, on completion of forward and backward integration, TSML would be the single largest steel complex of Pakistan.
According to him, besides an import of around 3.5 million tons per annum of remeitable scrap, Pakistan is a net importer of around 3.8 million tons per annum of semi-finished/finished steel. As such keeping in view the humongous upcoming steel requirements for "NAYA Pakistan Housing Program" and CPEC, more integrated projects like TSML are the dire need of the country.
In his letter, Rizvi stated that as advised by the PM's Adviser at the close of the meeting (on December 4, 2018), he tried to get a time from the Secretary Industries and Production the next day to also share with him the same documents /details which were shared with Adviser, adding that Federal Secretary almost the whole day long was extremely occupied and could not spare time. He had a meeting with the acting Joint Secretary Iqbal, who also was present in the Adviser's office during TSML's meeting with the Adviser on December 3, 2018.
"The relevant information like cost sheets, the cost of inputs and the sale prices of the product (DRI) during the only year of operation ie 2013, the financial statements audited by Ernst & Young for the year 2013 indicating an operational loss of $18.6 million was all shared with Iqbal," he said.
Zaigham Rizvi has also quoted his meeting with Ashraf Qazi, chairman/CEO of CIENA Group (the new investor), adding that he has requested the Adviser to expedite the formalities. "As CIENA quite actively is engaged with the financiers for restructuring of the loan and is time bound in this respect as such some sort of clarity on the feedstock gas tariff is essentially important for CIENA, before liabilities are incurred," he concluded.
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