The federal government has announced the closure of Pakistan Steel Mills (PSM), a state-owned enterprise burdened by years of heavy losses.
Secretary of Industry and Production revealed that the Sindh government has been offered 700 acres of the 19,000-acre PSM land to establish its own steel plant. “Apart from 700 acres, the land will be used for industrial purposes,” he added.
Chief Financial Officer (CFO) Arif Sheikh stated that the decision to close PSM stems from its poor performance and financial struggles. Established in 1974, the mill has been financially troubled for the past decade. The CFO noted that the annual salary cost for PSM employees is Rs3.1 billion, with the government paying Rs32 billion in salaries over the past ten years. Additionally, PSM consumed Rs7 billion worth of gas in the last decade, which Sheikh attributed to “politically-influenced recruitment and permanent staffing.”
In 2010, the regularization of 4,500 employees added an extra Rs2 billion to costs. Last year, a search for buyers for PSM proved unsuccessful.
The Sindh government plans to establish a new steel plant on the allocated land, according to the Secretary of Industry and Production. Furthermore, the federal government has decided to allocate 4,000 acres from the PSM site to special economic zones.