ISLAMABAD  -   The federal government is likely to give go-ahead to a plan to make Pakistan Steel Mills (PSM) functional next week, as the country’s largest industrial complex is dysfunctional since June 2015 due to many reasons.

An expert group, constituted by the federal government to devise revival plan for the PSM, has completed its task. “The revival plan will likely to be presented in next ECC (Economic Coordination Committee) meeting in upcoming week,” said an official of the ministry of industries and production.  He further said that revival plan would be submitted in federal cabinet after getting approval from the ECC.

Prime Minister’s Advisor on Commerce, Textile and Industries and Production and Investment, Abdul Razak Dawood last week informed a parliamentary committee that the government would need $800 million to revive PSM.

Under the revival plan, the capacity of the PSM would increase to 3 million tons per annum from existing capacity of 1 million tons per annum. The Mill, which remained closed for almost four years, is requiring a heavy investment to make it functional.

In November last year, the ECC had given the Ministry of Industries and Production two months to submit an operationalisation plan, which ended in January. The expert group, headed by Khalid Mansoor, CEO of Hub Power Company, in January 2019 had sought three more months before it could give an opinion on whether the mill could be managed or not. Sources said that the experts group has completed its work now and would submit the report to ECC next week.

The PSM is dysfunctional since June 2015 due to many reasons. The previous PML-N government had given bailout packages to the country’s large industrial complex, which failed to yield results.

The total losses and liabilities of the PSM have gone beyond Rs465 billion, besides around $2.5 billion foreign exchange loss per annum because of steel imports which could have been produced by the PSM.

The incumbent government had recently decided to delist the PSM from the privatisation list along with Pakistan International Airlines (PIA) and other public sector entities.

The government would restructure the PIA and PSM before their privatization, as no one would be interested in purchasing these two PSEs in the existing conditions. The government will privatize the PIA and PSM in second phase, which will take three to five years.

Pakistan is in discussion with half a dozen companies from Russia and China to run the PSM under public-private partnership and increase its capacity from 1.1 million to 3.5 million per year. Financial year 2007-08 was the last year when the PSM posted profit of Rs9.5 billion.

It ran into losses both in the PML-N and the PPP eras. Since then, its financial health has deteriorated. In June 2015, it was closed. The mills current total losses are around Rs200 billion apart from the liabilities.