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Russian state unit comes up with PSM revival package

Steel News - Published on Tue, 12 Feb 2019

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The Express Tribune reported that Russian state enterprise has offered Pakistan a comprehensive package for reviving the troubled Pakistan Steel Mills which includes a loan for balancing and modernisation of the large industrial complex. The Russian firm has claimed that it will turn the steel mill financially viable, enabling it to pay salaries to its employees in a year’s time while implementing a revival plan submitted to the Ministry of Industries and Production.

In the revival plan sent to the Ministry of Industries, which shared it with an expert group working on the revival of PSM, Russian state enterprise Tyazhpromexport said it had already offered a loan for a balancing and modernisation programme along with expertise for running the mill.

However, the offer had been ignored and later the company submitted a concept paper for reviving the mill.

The Russian giant has proposed the establishment of Pakistan Steel Mills Holding (Private) Limited and five subsidiaries including PSM COBP (Private) Limited, PSM Power Plant (Private) Limited, PSM Rolling Mills (Private) Limited, PSM Steel Making (Private) Limited and PSM Iron Making (Private) Limited.

Repair and modernisation work will be undertaken complex-wise. Citing an example, the Russian company said COBP was currently up to date and as such was fully functional. Once it became an independent company, it would carry out operations on its own by selling services, products and byproducts from the plant, it said.

Likewise, the proposed power plant has generation capacity of 165 megawatts, but it needs to be upgraded and modernised, which requires investment. The electricity generated by the plant will be sold to other complexes of the steel mill and K-Electric.

Governments of Pakistan Peoples Party and Pakistan Muslim League-Nawaz which had separately been in power from 2008 to 2018, failed to efficiently run PSM as its financial condition deteriorated persistently over the years. Now, the mill has shut down with losses exceeding Rs200 billion.
PSM, which owes PKR 19 billion to Sui Southern Gas Company (SSGC) for gas supply, had been operating at average 33% of its capacity during the PML-N’s tenure in 2015 when the public gas utility suddenly cut off supply. Since then, the mill has not been running and its losses have continued to mount.

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Posted By : Rabi Wangkhem on Tue, 12 Feb 2019
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