BEIJING, Aug 17: China has agreed to cooperate for the expansion of Pakistan Steel to increase its production capacity beyond three million tons per annum within next three years from the present 1.1 million tons.

This was stated here by Abdul Qayyum Khan, chairman of Pakistan Steel, in an interview with APP at the end of his week-long visit to China. During the visit, which concluded on Monday, the two sides also signed a memorandum of understanding (MoU) to carry out bilateral cooperation in the steel sector on regular basis.

Under the MoU, Metallurgical Construction Corporation (MCC) of China will consider providing financial and technical support to Pakistan Steel to implement its expansion project.

Terming his visit as highly successful, Mr Khan said it opened new avenues of bilateral cooperation, giving boost to steel production in the country. Chinese steel experts will soon visit Pakistan to help improve quality and efficiency of steel production.

About the Pakistan Steel's expansion, he said he was expecting a soft-term credit-line from the Chinese government so that MCC and PS could enter into a formal contract. He said Pakistan Steel had already asked its British consultant to study the feasibility report on the expansion plan, prepared by the Chinese side.

In this connection, he said Pakistan was also negotiating with Russia. "If the offer from China or Russia would not be feasible, the government of Pakistan would prefer to invite international tenders to ensure a fair and transparent deal," Mr Khan added.

Pakistan Steel in the recent years has strengthened its financial position and has achieved the capability to increase the production capacity to a reasonable level, even without foreign support.

Pakistan, he said, attached great importance to its cooperation with China, since it was not only a friendly country, but had also emerged as a major steel producing power in the world.

Mr Khan, who visited China's steel production units in Shanghai and Wuhan, said the country's steel production had already crossed 200 million tons this year. There is a prediction that China's annual steel production capacity will reach 330 million tons by 2005.

In reply to a question, he explained Pakistan Steel planned to enhance its production capacity to 1.5 million tons from its own resources. "However, for financing the expansion to 3 million tons, we are negotiating with China and Russia to seek attractive credit-line, soft-term loan and optimum timeframe." -APP