Clarification

A news item appeared in a section of press with reference to some working submitted with the Engineering Development Board (EDB) by Pakistan Steel Melters Association on which we would like to comment as follows:
a. Ship-breaking industry is paying sales tax at the rate of Rs 4,848 per ton whereas melters are liable to pay Rs 4,800 per ton. Hence ship-breaking industry is paying slightly more than melters.
b. If the so-called electricity cost of melters has increased two-fold since 2007 which is not the factual position, our processing/cutting costs have also increased much more than their electricity cost. This includes labour wages, transportation, cutting gases, machinery/equipment maintenance and operational cost of our machinery due to exorbitant increase in the fuel prices.
c. The steel melters make several types of ingots/billets using different types of processes, out of which majority of the ingots made are of inferior quality having sub-standard specifications. As such the bars/long products made out of such sub-standard ingots/billets are not being used in government/semi-government projects and multi-storied buildings, whereas the ship-plates being used for re-rolling are of the highest standard which were being monitored by International classification societies such as Lloyds Register of Shipping during building of ships.
During the entire life of a ship, it is closely monitored by classification societies so that all the materials which were used during the building of a ship should remain at par with the same specifications as that of a newly built ship including the ship-plates, angles, etc. It may be mentioned that ship-breaking is not only done in Pakistan but is done world-wide and the main players in this field are many developed/developing countries including China, India, Turkey, Spain and Bangladesh and even USA which are doing ship-breaking in a big way and their steel is also used in the steel sector.
d. The majority of steel consumed in Pakistan is being imported and as such whichever internationally available material is comparatively viable takes a share of the market accordingly. Presently there is a consumption of about 3.0 million tons of total re-rollable material in the country out of which major share is still being produced by melters ie over 2.00 million tons. Only a mere share of less than 0.4 million tons re-rollable material is being supplied by ship-breaking industry which comes to less than 20 per cent of total consumption in the country.
During the early era of 2000 till late 2007 ie for almost seven years, when the prices of ships went as high as around USD 700/- per LDT our industry became unviable and as such it was almost closed and even then we did not approach any government department to disturb any other steel industry in Pakistan.
Ship-breaking is one of the biggest industries of Balochistan which is the most under-developed province of Pakistan, providing employment to thousands of workers directly and hundreds of thousands of people indirectly. It is also contributing revenue to the government exchequer to the tune of billions of rupees apart from millions of rupees to the Balochistan government. It is a completely documented industry and there are no chances of any revenue leakages as against other steel sectors where the leakages are periodically reported in the press as well.-PR