Pakistan Steel Mills – Story of Neglect and Destruction

Pakistan Steel Mills (PSM) is the largest single industry of producing raw iron and finished steel products in Pakistan. If this fact is put into figures, it translates into production capacity of 1.1 million tonnes of iron along with 5.5 million tonnes of iron finished products.

The PSM is facing bankruptcy and the lives of 13,000 workers and their families are at stake. Dozens of industries affiliated with steel mills are facing closure. The workers have not been paid for months while the government in ‘coalition’ with the management has plundered Rs. 45 billion (£354 million) of workers welfare funds. This money is intended to be spent on workers and their families. Pakistan Steel Mills has been in a loss for the eight years continuously and currently with the decrease in the supply of natural gas is not able to produce the required steel. It should be remembered that the steel mills paid its dues back in 2002. The destruction of steel mills started in 2008 in the government of Pakistan People’s Party (PPP). Destructive and ill-conceived policies by then Prime Minister Yousaf Raza Gillani have destroyed the steel mills. A management backed union rep was made a member of the board of directors due to his loyalty to the PPP regime and remained a member from 2008-2013. Massive and rampant corruption results in huge losses. Corruptions include allotting of lands and houses to sold out union reps and providing private contracts to favourites against the procurement policy shooting up the cost to the company up to 400% from previous years’ contracts. In the last two years, a retired general has been put at the helm of affairs with the dubious target of making the steel mills profitable again with the highest salary, perks and privileges in the history of the steel mills. All this barbaric exploitation of steel mills is going on while the workers have not been paid for the last many months. The workers and management associated with the steel mills have not had a pay increment since 2012 while the government and senior management in collusion has millions of rupees in worker’s gratuities and provident funds. The workers who retired in 2013 are still waiting for their end of employment benefits while the families of workers who have died after 2015 are still waiting for arrears and benefits. The propaganda in the mainstream media is that the steel mill has always been in a loss. The reality is opposite. Steel mills paid their dues in 2002 while in June 2013 they paid Rs. 113 billion (£0.8 Billion) in taxes.

The importance of steel mill can be seen from the fact that after its establishment, the industries of slag cement, billet steel bars, twist bars and metal wires flourished in the country which was a marvellous achievement in making construction industry competitive. The government and management are clearly hell-bent on the destruction of steel mill so that its hundreds of billions of rupees worth property can be plundered and the steel imports business can flourish freely through their favoured contractors.