The federal government has decided to move forward with the Pakistan Steel Mills permanent shut down after numerous attempts to privatize the state-owned enterprise failed, the decision marks the end of an era for the once-flourishing industrial giant. The government now faces the challenge of managing the repercussions of this closure on both the economy and the workforce.
Pakistan Steel Mills Permanent Shut Down: Financial Burdens and Mismanagement
One of the key reasons for the Pakistan Steel Mills permanent shut down is the overwhelming financial burden the mill has posed on the state. According to the Secretary Industries & Production, the annual financial burden of the Mill’s employees stands at Rs. 3.1 billion.
Over the last decade, the government has disbursed Rs. 32 billion in salaries alone, with an additional Rs. 7 billion spent on gas. The Chief Financial Officer of PSM highlighted that these figures are exacerbated by thousands of political appointments and the regularization of temporary employees, leading to the financial insolvency of the mill.
Sindh Government and Special Economic Zone
In light of the permanent shut down, the federal government is exploring alternative uses for the land and resources previously dedicated to PSM. The Sindh government has expressed interest in establishing its own steel mill and has been offered around 700 acres of land for this purpose. Moreover, the government plans to lease 4000 acres of PSM land to develop a Special Economic Zone. This initiative aims to attract investment and boost economic activities in the region, potentially offsetting some of the negative impacts of the steel mill’s closure.
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