ISLAMABAD: The Board of Directors (BoD) of Pakistan Steel Mills (PSM) has opposed the complete closure and scrapping of the mill, saying that the Cabinet has been ill-advised.
In a communication with the Prime Minister Shehbaz Sharif, Chairman PSM Board Aamir Mumtaz has stated that from the recent reports published in the print media, it appears that the government has decided to close down the Mills permanently. The Cabinet has been ill-advised on this matter. The decision-making process bypassed consultation with the Board and other industry and economic experts.
He said the SIFC/Cabinet directive to carry out consultation and explore all revival options was also evaded. The proposals forwarded by the Board of Pakistan Steel were ignored, no discussion with the Board was carried out and the Board has not formally resolved to support this decision.
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“This decision appears to be made in haste and lacks appropriate due diligence that is merited for a high-profile national asset such as Pakistan Steel,” he said, adding that the decision to close Pakistan Steel Mills (PSM) has been met with significant opposition and concerns from various stakeholders including the government allies, industry experts, and employees and has raised concerns about the lack of transparency and consultation in the decision-making process.
According to Chairman PSM Board, the following arguments will demonstrate that this decision is clearly not in the best national interest and must be rescinded immediately. (i) Losses - closing the mill does not eliminate or even reduce by much the annual losses. Approximately 90% of the losses are due to finance or interest charges on the liabilities The accumulated liabilities of PSM can be resolved through a comprehensive liability settlement exercise without closing the mills entirely; (ii) National Interest: Pakistan as a country is highly lagging in large scale manufacturing, hence it needs more such industries not less. How can the Government justify closing down and scrapping the Pakistan Steel Mills when we don’t have much of an industrial base in the country; (iii) Unemployment: Closing down PSM will exacerbate unemployment issues. Tackling high unemployment in the country requires reviving the existing large-scale manufacturing industry like PSM along with more investment to establish new industrial units ;(iv) Asset Integrity: Announcing a shutdown without proper analysis of the effects on PSM’s land assets and a viable plan could lead to the misuse and plunder of land assets; and (v) Public Support: There is no public support for shutting down Pakistan Steel. The people of Pakistan want to see a reduction in losses, revival and further investment into this enterprise to create economic activity and jobs.
Aamir Mumtaz was of the view that the government should focus on resolving PSM’s liabilities, reviving the mills, and maintaining large-scale manufacturing capabilities in the national interest, rather than resorting to closure, which would have severe economic and social consequences.
This decision will also create further despondency; hence it needs to be reversed and a more positive plan is required.
Copyright Business Recorder, 2024