Pakistan Steel Mills closure cost $18 billion: Authorities

KARACHI: Pakistan has lost foreign exchange worth $18 billion as result of the closure of Pakistan Steel Mills, a once profitable entity.

A case of theft amounting to Rs10 billion was also discovered within the mills, currently under investigation by the Federal Investigation Agency (FIA). 

Since 2015, the government has spent Rs65 billion on the maintenance, fuel, salaries, and miscellaneous assets of the now closed mills. In the 2022 fiscal year alone, the mills recorded a loss of Rs228 billion, with the total debt reaching Rs386 billion, the Hum Investigation Team reports.

Investigations by the FIA and the National Accountability Bureau (NAB) are ongoing to probe irregularities and corruption amounting to Rs284 billion. Some of the investigations reveal that the steel mills still possess valuable assets, including 19 thousand acres of land, thousands of houses, and other items with an estimated value of Rs839 billion.

The present government halted the privatisation process of the steel mills, previously meant to revitalise its operations. While several international companies initially showed interest in taking over operations of the mills, they eventually withdrew their offers because of the uncertainty surrounding the mills’ financial and management situation.

The closure of the mills has resulted in significant job losses, with 5,282 employees being retrenched. However, this retrenchment has reduced the monthly salary bill from Rs35 crore to Rs10 crore.

Despite repeated requests for clarification on factory conditions, the steel mill authorities have declined to respond.