China has agreed to co-operate for expansion of Pakistan Steel Mils (PSM) to increase its production capacity beyond 3 million tonnes per annum within next three years from the present 1.1 million tonnes.
This was stated here on Tuesday by Lieutenant General Abdul Qayyum Khan (Retd), Chairman Pakistan Steel Mils (PSM) in an interview with newsmen at the end of his week-long visit to China.
During the visit, which concluded on Monday, the two sides also signed a Memorandum of Understanding (MoU) to carry out bilateral co-operation in the steel sector on regular basis.
Under the MoU, the Metallurgical Construction Corporation (MCC) of China will consider to provide financial and technical support to PSM to implement its expansion project.
Terming his visit as highly successful, Qayyum said, it opened new avenues of bilateral co-operation giving boost to steel production in the country. Chinese steel experts will soon visit Pakistan to help improve quality and efficiency of steel production.
Regard to expansion of Pakistan Steel mills, he said he was expecting a soft-term credit-line from the Chinese government so that the MCC and PSM could enter into a formal contract.
He said the PSM has already asked its British consultant to study the feasibility report on the expansion plan, prepared by the Chinese side.
In this connection, he said Pakistan was also negotiating with Russia. "If the offer from China or Russia would not be feasible, the government of Pakistan would prefer to invite international tenders to ensure a fair and transparent deal," General Qayyum added.
The Pakistan Steel Mills in the recent years has increased its financial position as well as production capacity to a reasonable level, even without foreign support
Pakistan, he said attaches great importance to its co-operation with China, since it is not only friendly country but has also emerged as major steel producing power in the world
General Qayyum, who visited China's steel production units in Shanghai and Wuhan said the country's steel production has already crossed 200 million tonnes this year. There is a prediction that China's annual steel production capacity will reach 330 million tonnes by 2005
To a question, he explained the Pakistan Steel plans to enhance its production capacity to 1.5 million tonnes from its own resources.
However, for financing the expansion to 3 million tonnes, they are negotiating with China and Russia to seek attractive credit line, soft-term loan and optimum timeframe.
Besides expansion, he said it is very imperative to take up revamping, repair and maintenance of the plants, equipment and machinery to maintain optimum compatibility of the old and new equipment and machinery. To achieve this target, they are also looking forward to China's support, he added.
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