Pakistan Steel: slowly coming back on track

Society Pakistan & World Affairs
1

Good to see PSM coming back on the track though slowly . Should we still go for the option of Privitization of this national asset ?

Steel mills: Shipments increase coal stocks to 158,000 tons

By Our Correspodent
Published: September 11, 2014

http://i1.tribune.com.pk/wp-content/uploads/2014/09/760724-SteelmillAFP-1410386197-701-640x480.jpg

25% is the current capacity utilisation of the Pakistan Steel Mills, a figure they are hopeful of improving PHOTO: AFP

KARACHI: Two ships – DL Dahlia and Ever Mighty – carrying 110,000 tons of coal from Australia, have arrived at the Pakistan Steel Jetty at Port Muhammad Bin Qasim, Karachi.

According to Pakistan Steel Mills (PS), the ships reached the jetty on September 5 and 6.

Now, the coal stock of PS has increased to **158,000 tons, **while the quantity of iron ore (lump and fine) has reached 52,000 tons.

PS management said on Wednesday that they are confident the arrival of the latest shipments of coal will increase production and capacity utilisation of the mills, helping achieve the targets set by the government.

http://i1.tribune.com.pk/wp-content/uploads/2014/09/251.jpg

Though at present the capacity utilisation stands at a low of 25%, the workers and staff, under the supervision of Chief Executive Officer Major General (retired) Zaheer Ahmed Khan, are hoping to revive this national asset.

**Furthermore, the arrival of raw material will help to increase production level up to 77% by January 2015. However, timely release of financial lifelines will be of pivotal importance.
**

The management thanked the government, especially the Ministry of Industries and Production, Privatization Commission, Ministry of Finance and related organisations for their positive role in the revival of the industry.

Officials pointed out that one more ship carrying 55,000 tons of iron ore from Mauritania will arrive in the third week of the current month. In addition to that, another ship loaded with 55,000 tons will reach next month from Mauritania.
*

Published in The Express Tribune, September 11[SUP]th[/SUP], 2014.*

2

Re: Pakistan Steel: slowly coming back on track

Please do not post this kind of news, Pehlay hi tabdeeli aur inqilaab anay maiN preshani ka samna hay.. aisi khabrooN say doctor nay inhay perhaiz bataya hay

3

Re: Pakistan Steel: slowly coming back on track

Pakistan Steel production capacity improving

By The Newspaper’s Staff Reporter
Published about 9 hours ago

[TABLE=“class: media media–left one-whole palm–one-whole, width: 650”]

ISLAMABAD: Finance Minister Ishaq Dar chairs a meeting on Pakistan Steel Mills revival on Saturday.

**

ISLAMABAD: **The production capacity of Pakistan Steel Mills (PSM) has risen to **25% from 3% in May 2014 **owing to financial bailout package of Rs18.5 billion.

This was stated by CEO of Pakistan Steel, Maj-Gen (Retd) Zaheer Ahmed Khan, while briefing the Federal Minister for Finance, Senator Muhammad Ishaq Dar, here on Saturday.

**
An official announcement issued after the meeting said that Mr Khan claimed that the production capacity is expected to escalate to** 77pc of the total 1.1 million tonnes per annum capacity by end of December 2014 which would be a break-even point, nullifying the losses occurring to the mills.

He apprised the minister that production is expected to touch 30pc mark by the end of September and should touch 40pc in October.

Mr Khan also briefed the minister about some issues faced by Pakistan Steel, including the imposition of 5pc duty on import of iron ore.
The minister responded that the Economic Committee of the Cabinet would consider the issue and take an appropriate decision in its next meeting.

Mr Khan also requested for relaxation in the condition of advance payment of GST on each imported shipment of raw material. He said it would be easier for Pakistan Steel to pay the GST on finished products.

The finance minister gave instructions to FBR to submit the case for decision regarding allowing three months time to PSM for payment of GST.
Other relevant administrative matters were also discussed during the meeting. The minister appreciated the surge in the production at PSM and asked the CEO to keep up the good spirit.

He hoped that Pakistan Steel would achieve the goals and targets that had been set for its complete revival.
*

Published in Dawn, September 21th, 2014*

4

Re: Pakistan Steel: slowly coming back on track

If you privatize PSM then it will run on 100 percent capacity and private sector will soon turn it into two steel mills. Azmaish shart hay.

5

Re: Pakistan Steel: slowly coming back on track

whenever i see a overly positive thread title about Pakistan, i immediately KNOW that the OP MUST be Desert Bird…lo and behold, i am always RIGHT!

why am i right 100% of the time? isn’t that OBVIOUS! :smiley: hehehe :rotfl:

6

Re: Pakistan Steel: slowly coming back on track

**ye baat bilkul theek hai

Masla wo political workers dalte hae jin ko 90s mein PPPP and PML-N ne rkha tha PSM mein , wo shor mchate hai ke downsizing shru ho jaye gi phir …

Pakistan Railway ko bhi isi lye ni kr rhe privatize … Saad Rafique wese Railway ko kafi behtr position pr le aya hae …
**

Improvement in Railways

RECORDER REPORT
http://www.brecorder.com/templates/br/images/emailButton.pnghttp://www.brecorder.com/templates/br/images/printButton.pnghttp://www.brecorder.com/templates/br/images/pdf_button.png

http://www.brecorder.com/images/br-black.gif

Minister of Railways Khawaja Saad Rafique is probably the most agile person in Nawaz Sharif’s cabinet; he is reported to have turned the corner of railways’ faltering financial health through his hard work and imaginative policies. Talking to the APP at the Lahore Railway Headquarters on 31st August, 2014, Railways General Manager (Operations) said that the financial position of Pakistan Railways had improved tremendously after passenger and freight sectors attracted commuters and traders due to several measures taken by the PR administration. It was claimed that all-out efforts were made to rationalise fares, improve the availability of locomotives in the freight sector to ply up to 16 cargo trains in a day, ensure punctuality of passenger trains from 10 percent to 55 percent.

Efforts were also made to raise fuel availability from zero level up to 15 days requirements, streamline train operations, and retrieve several hundred acres of encroached railway land. GM operations attributed the success of attracting passengers to use railways for their travel to the strenuous efforts of the Railways Minister. As cargo trains could generate massive revenues, it was decided to restore freight trains to the extent of two trains daily from Karachi port to upcountry, with hopes of increasing the frequency to **8-10 trains **by the end of the current year. Transport of oil through cargo would fetch Rs 4.4 billion annually while Rs 5 billion could be earned by dispatching export/import containers through freight trains. Two locomotives are expected to be rehabilitated every month while rehabilitation of 27 locomotives is already in progress to induct them into freight operation. Railways has valuable assets worth billions of rupees in the shape of land, most of which is illegally occupied. The administration launched a campaign against illegal occupants and as many as 2,704,750 acres of land has been retrieved so far. Lahore-Karachi double track has been completed; it will be inaugurated anytime soon.

**A snapshot of Railways’ recent achievements confirms a widely held belief that Pakistan Railways is one rare entity which has made a considerable progress over the last one year or so due to the untiring efforts of its Minister to transform its working environment and change the fortunes of this sinking PSE.

**This would appear to be strange in a country where the relevant minister and top officials of a state-owned business organisation just mark time, overburden the entity by recruiting their kith and kins and the enterprise is in a much worse shape when they depart. The case of railways was no different. Pakistan Railways was in a critical stage when the present government took over due to locomotive shortages, a lack of maintenance and motivation, poor infrastructure, corruption, over staffing, encroachment on its lands, fuel shortage etc.

Passengers and freight services declined substantially over the last five years and gross earnings of Pakistan Railways nose-dived from Rs 23.2 billion in 2008-09 to Rs 18.1 billion in 2012-13. With capping of overdraft by government of Pakistan in 2007, finances required for even maintenance were not available. Over-aged infrastructure and rolling stock, increase in fuel prices, rupee depreciation and subsidised railway fares led to an increase in expenditure. A sharp increase in salaries and pensions resulted in diversion of all revenue earnings to this obligatory payment at the cost of operational and maintenance requirements. Ultimately, the financial position became so precarious that Finance Division had to commit itself to bear the expenses of even salaries and pensions till the crisis was over.

One must not lose sight of the fact that Pakistan Railways is no ordinary public sector enterprise. **Its network comprises 7,791 km route, 423 locomotives, 1700 passenger coaches and 16,179 freight wagons **and its efficient functioning could greatly facilitate commerce and trade, reduce transportation costs and promote rural development and natural integration. Railways also provides livelihood to a very large number of people directly and indirectly and is a cheap mode of transportation. The policy approach of the new administration is very positive. It does not believe in downsizing but has concentrated its efforts on upgrading and procuring more locomotives, retrieving its encroached land where shops, markets and plazas can be constructed, ending corruption and increasing efficiency.

The government of Pakistan has also allocated Rs 39.4 billion in PSDP for the financial year 2014-15 for the development projects of Pakistan Railways due probably to the clout of the Railways Minister and his zeal to make a difference. Anybody who has travelled by rail or booked cargo for some upcountry destination recently could vouch for the improvement in the working of railways which is a good omen for the economy of the country and gives a new hope.

However, we would urge upon the government to confine its efforts to the rehabilitation and upgradation of the existing railway infrastructure for the time being rather than announce high cost and more complex projects like connecting Murree and Muzaffarabad with the railways’ main network.

7

Re: Pakistan Steel: slowly coming back on track

any prablam?

8

Re: Pakistan Steel: slowly coming back on track

Resuscitating steel production: Pumping inputs to boost PSM

By Our Correspondent
Published: September 23, 2014

http://i1.tribune.com.pk/wp-content/uploads/2014/09/765827-Ironorepiccopy-1411409352-785-640x480.jpg

With the arrival of these ships, the total quantity of raw material stock has increased to 160,000 tons of coal and 112,000 tons of iron ore. PHOTO: STOCK IMAGE

**

KARACHI: ** Two ships carrying iron ore of 20,000 tons and 50,000 tons have arrived at the Pakistan Steel Jetty at Port Muhammad Bin Qasim, according to Pakistan Steel Mills (PSM) sources.

Meanwhile, the ship that brought 50,000 tons has started offloading on September 19, said a spokesman.

Earlier, two ships carrying 50,000 tons each of coking coal from Australia were also cleared at the Pakistan Steel Jetty, while one carrying 55,000 tons of iron ore from Mauritania is expected to reach by October 6.

http://i1.tribune.com.pk/wp-content/uploads/2014/09/771.jpg

With the arrival of these ships, the total quantity of raw materials stock of PSM has increased to 160,000 tons of coal and 112,000 tons of iron
ore (Lump/Fine).

The management is confident that with the arrival of the latest ships, the production and capacity utilisation of the mill will further increase and help achieve the targets set by the government.

It is pertinent to mention that the current average capacity production utilisation of PSM has increased to almost 25%. The total installed capacity of the mill is 1.1 million tons per annum.

“PSM workers and staff are working hard for the revival of the national asset,” reiterated PS Chief Executive Major General (R) Zaheer Ahmad
Khan. Furthermore, the latest arrived raw material will help in increasing the production level of the mill up to 77% by January-February 2015, however, the timely release of financial package will be of pivotal importance.

PSM is one of the 35 steel mills that the former Soviet Union established in different countries with 1.1 million tons standard production capacity.

It is the only integrated steel mills in Pakistan with a massive workforce of over 16,000 employees, which according to many experts, is one of its major problems in turning it into a profitable company.

The organisation has accumulated huge losses in the past six years and needed an injection of about Rs18-20 billion in one go to purchase raw materials and be able to return to optimal production levels.

However, this government, like its predecessor, has been struggling in improving affairs at PSM as it continued to pour in money in small installments. Resultantly, the company has been running at an embarrassing low production capacity of below 5%, the lowest capacity ulilisation in its history of more than 32 years.

Pakistan has been one of the few countries that failed to expand their steel mills. The mills set up with Soviet assistance in Iran and other countries are now running at an annual capacity of about 3 million tons per annum.

However, this time the government has decided to end this vicious cycle by pumping in a huge amount of money at one go.
*

Published in The Express Tribune, September 23[SUP]rd[/SUP], 2014.*

9

Re: Pakistan Steel: slowly coming back on track

PSM receives Rs1.75bn

         By [The Newspaper's Staff Reporter](http://www.dawn.com/authors/397/dawnourstaffreporter)
         Updated about 13 hours ago
       
   
                                                                             [TABLE="class: media media--left one-whole palm--one-whole"]



           With this instalment, the  mills has so far received Rs13.52bn out of approved Rs18.5bn financial  restructuring package. — File photo/AFP




                           KARACHI: Pakistan Steel Mills (PSM) on Thursday received fifth installment of Rs1.750 billion under the restructuring package.

This amount will help in clearing employees’ salary of 45 days by next week (half of July and full salary of August), said spokesman of PSM Shazim Akhtar.

With this instalment, the mills has so far received Rs13.52bn out of approved Rs18.5bn financial restructuring package.
When asked that PSM had failed to achieve 30 per cent production in the current month, he said the average production has reached 25 per cent till September 20, 2014 from three per cent in May, 2014 and six per cent in whole of 2013-14. With the help of the recent financial restructuring package and streamlining of supply chain of raw material the production capacity would touch around 30 per cent by next week, he added. Raw material position is quite satisfactory as the mill has 112,000 tonnes of iron ore (lump and fine) and 160,000 tonnes of imported coal, he said.

The mills management will enhance the production capacity to 40-50 per cent next month and 77 per cent by January 2015 depending on availability of raw material and financial facility, he said.
*

Published in Dawn, September 26th, 2014*

10

Re: Pakistan Steel: slowly coming back on track

All set for PSM sell-off as output up
**
Privatisation Commission decides to appoint financial adviser by end of next month**

October 26, 2014
IMRAN ALI KUNDI

http://nation.com.pk/assets/thenation/images/client/hr.png

ISLAMABAD - As the production of financially-troubled Pakistan Steel Mills (PSM) has started improving due to the bailout package, the PML-N government has started the process of privatising the public sector enterprise as agreed with the International Monetary Fund (IMF).

The Privatization Commission has decided to appoint financial advisor by the end of next month of November to assist the government in privatization process of the PSM. The financial advisor would engage the multidisciplinary team of experts with a proven experience of corporate restructuring and privatization in the steel sector. “The government is likely to privatize the Pakistan Steel Mills during the first half of the next year”, said an official of the
Privatization Commission. He added that government is actively working to restructure the sick national entity before its privatization, as it had released
Rs 13.5 billion for enhancing its production since May this year.

Pakistan had agreed with the IMF to privatize 68 public sector entities including Pakistan Steel Mills for the bailout package worth of $6.64 billion under extended fund facility in September 2013. However, the financial condition of the PSM was deteriorated when PML-N took the charge in June 2013 and government believed no party would be interested in privatization sans its restructuring.

Therefore, the Economic Coordination Committee (ECC) of the Cabinet on April 25, 2014 had approved Rs 18.5 billion bailout package for the revival of PSM in a bid to restructure the national entity before going for its privatization. The privatization of the PSM had two parts, as first govt will restructure it and will go for its privatization when its production capacity enhances to 40 per cent, which was supposed to be done by the end of ongoing year.

The production of the PSM started increasing after the bailout package, enhancing to 25 per cent in September from 3 percent of May 2014 due to the financial bailout package. The revival plan was envisaged in achieving 77 per cent capacity of the PSM till June 2015. The government has now decided to initiate the process of the privatization of the Pakistan Steel Mills after its production has increased.

Pakistan Steel, facing accumulated losses of Rs 255 billion, is one of the first big organisations to go under the hammer under government’s privatisation plan. However, sources in PSM informed that they need additional eight billion rupees to enhance the production capacity to 77 per cent as planned by the government.

It is worth mentioning here that government had disinvested the shares of two entities including United Bank Limited (UBL) and Pakistan Petroleum Limited (PPL). Meanwhile, the government would privatize 27 public sector entities during ongoing financial 2014-2015. The government would generate at least Rs 300 billion through privatization programme during FY2014-2015, and this amount is far above the Finance Ministry’s estimates of Rs 198 billion that are projected from privatization programme in the budget 2014-2015.

11

Re: Pakistan Steel: slowly coming back on track

12

Re: Pakistan Steel: slowly coming back on track

So dispite having the biggest coal reserves in the world Pakistan is importing coal from Australia.... Wah! very good.

13

Re: Pakistan Steel: slowly coming back on track

Thank god for Desert bird. All you cynical stick in the mud’s are a torture to read.

14

Re: Pakistan Steel: slowly coming back on track

Please make sure you include your comments otherwise it may be removed.

15

Re: Pakistan Steel: slowly coming back on track

Isn't pakistani coal of bad quality? Still, I guess that you can use more of it since it is local, though we don't know what is the cost / benefit ratio of thar coal.

16

Re: Pakistan Steel: slowly coming back on track

Desertbird , you need to update Dawn and tell them all is good at PSM

Steel Mills at standstill - Pakistan - DAWN.COM

ISLAMABAD: Having added Rs53 billion losses to its stock of Rs258bn debt and liabilities in 16 months, Pakistan Steel Mills has remained shut for three weeks and there are no signs of its immediate revival.
This is for the first time since its establishment three decades ago that “the mother of all industries” has come to a complete halt mainly because of poor maintenance and repairs as required by standard operating procedures and operational manuals despite internal warnings.
Know more: Pakistan Steel production capacity improving
The federal government is yet to order an inquiry into the matter, although the PSM management, while securing Rs18.5bn budget support, had promised in April to achieve 50 per cent capacity utilisation in October and earn a profit of about Rs250 million in January next year with 77pc capacity utilisation.
In October, the plant could produce only 1870 tons of iron and steel against its daily capacity of 91,667 tons. This comes at a time when the government has sought applications for appointment of financial advisers for PSM’s privatisation.
Senior government officials said the country’s largest industrial complex had been closed down on Oct 8 after hot metal stopped because of a hole having developed in one of its two converters. An emergency was declared on the day when iron notch of blast furnace No 1’s cooler burst and the hot metal spread. The converter had been under maintenance since early this year.
The officials said the PSM management had taken a few days to clean the plant and repair the damaged parts but failed to resume production. The plant is unlikely to resume operations soon.
Informed sources said the plant faced a technical fault because it was not being run as envisaged in the operational manual and the quality and quantity of the blast furnace and other input materials were not aligned to the machine design, affecting its production cycle rhythm and sustainability.
Given the fact that steel plants are run 24 hours for 365 days on 1600-1800 degree Celsius, any unplanned shutdown has serious consequences. Under similar circumstances, blast furnace No 2 of the plant had collapsed 14 months ago.
At risk are foreign exchange expenditures, balance of payments and non-utilisation of human resources, thereby strengthening monopoly of the private sector.
Instead of a metallurgical engineer or a business expert, mechanical engineer retired Maj Gen Zaheer Ahmed Khan was appointed Managing Director of PSM by the PML-N government in April to turn around the mills with a Rs18.5bn budget support. But PSM has added Rs53bn to its stock of debt and liabilities since June last year and about Rs18bn since the new manager took over early this year.
Mr Zaheer had promised 20pc capacity utilisation in July, but it stood at 7pc. The capacity utilisation stood at 11pc against a promise of 30pc in August and 21pc in September against the target of 40pc. Production flattened to a maximum of 1871 tons in October against the target of 46,000 tons (50pc capacity utilisation).
According to the sources, the MD has now sought another budget support of Rs8bn.
Interestingly, the PML-N government has informed the International Monetary Fund that PSM had suffered financial problems because of the 2008 global recession and that it had appointed a professional board of directors for its turnaround and subsequent sale.
But a cursory look at the board reveals that most of its members are government servants or belonging to state-owned companies.
“The present state of PSM was due to unchecked corruption, inefficiency, over-employment and government’s lukewarm attitude towards its revival,” former industries and production secretary Shafqat Naghmi reported in a summary sent to the Public Accounts Committee (PAC) of the National Assembly.
He said the problem started in 2008-09 when PSM had suffered Rs26.45bn operating losses.
The losses kept on increasing as 4,732 temporary and about 300 daily-wagers were regularised with backdated benefits from July 2010, despite strong opposition by the ministries of finance and industries and production.
The man responsible for the en mass regularisation was sacked on the orders of the PAC, reportedly because of his fake degree.
During the hearing of a suo motu case, the Supreme Court had ordered registration of cases against corrupt officials. The Federal Investigation Agency registered 10 corruption cases while a forensic audit of the production and sale and purchase deals was rejected by the PSM board when incumbent Finance Minister Ishaq Dar was chairman of the Senate standing committee on industries and production.
As a consequence, former prime minister Yousuf Raza Gilani had sacked the then PSM chief on corruption charges, but the FIA failed to make any recovery.
The Supreme Court had transferred the investigation to the National Accountability Bureau in May 2012 and directed it to complete the inquiry in three months. The case has been pending before the court and the NAB investigation is yet to produce any conclusive result.

17

Re: Pakistan Steel: slowly coming back on track

In NS's previous era I used to hear that Govt purposely dont want to fix Steel Mill problems to make sure Ittefaq foundry is flourished. No idea if its true.

18

Re: Pakistan Steel: slowly coming back on track

By the way
There is no production since last three weeks

19

Re: Pakistan Steel: slowly coming back on track

woh kesay?

how do you track production of steel?

20

Re: Pakistan Steel: slowly coming back on track

According to Dawn,

[quote]
Pakistan Steel Mills has remained shut for three weeks and there are no signs of its immediate revival.
[/quote]