PSM Board Opposes Govt’s Decision to Shutdown Steel Mills

The Board of Directors (BoD) of Pakistan Steel Mills (PSM) has opposed the complete closure of the steel mills, stating that the cabinet has been misadvised. Chairman of the BoD, Aamir Mumtaz, has written a letter to the Prime Minister, President, Finance Minister, Chairman Standing Committee, and Secretary SIFC, expressing concerns over the government’s decision to close Pakistan Steel Mills. In his letter, Aamir Mumtaz highlighted that reports published in the print media indicate the government’s decision to permanently close Pakistan Steel Mills. He asserted that the cabinet has been ill-advised on this matter. The decision-making process bypassed consultation with the board and other industry and economic experts. The directive from the SIFC and Cabinet to carry out consultations and explore all revival options was also evaded. Mumtaz emphasized that the decision-making process overlooked critical consultations. He pointed out that the proposals submitted by the Pakistan Steel Board were disregarded, no dialogue was held with the board, and the board did not formally support this decision. Mumtaz added that the decision seems hasty and lacks proper caution for a high-profile national asset like Pakistan Steel. The decision to close PSM faced strong opposition and concern from various stakeholders, including government allies, industry experts, and employees, who criticized the lack of transparency and consultation in the decision-making process. According to Mumtaz, the decision to close the mill does not eliminate or reduce annual losses, as approximately 90 percent of losses are due to finance or interest charges on liabilities. These accumulated liabilities can be resolved through a comprehensive liability settlement exercise without completely closing the mills. Pakistan is far behind in large-scale manufacturing and requires more such industries. Closing and liquidating Pakistan Steel Mills cannot be justified when there is a need for a more substantial industrial base in the country. Closing PSM will exacerbate unemployment issues. To address rising unemployment, there is a need to invest in reviving large-scale manufacturing industries like PSM and establishing new industrial units. Announcing a shutdown without a proper analysis of the impact on PSM’s land assets and a viable plan could lead to misuse and plunder of these assets. There is no public support for closing Pakistan Steel. The people of Pakistan want to see a reduction in losses, revival, and further investment in this business to generate economic activities and job opportunities. Aamir Mumtaz urged the government to focus on addressing PSM’s liabilities, reviving the mills, and maintaining large-scale manufacturing capabilities in the national interest rather than resorting to closure. He stressed that shutting down the mill would have severe economic and social consequences and called for the decision to be reversed in favor of more positive planning.