KARACHI, July 11: Pakistan Steel chairman, senior management, engineers and workers are confident of operating on 90 per cent plus and earning a net profit of Rs3-4 billion during the fiscal year 2006-07. In the fiscal year 2005-06, Pakistan Steel operated on an average of 62 per cent capacity, as it went down to 35 and 36 per cent because of the problem in coke oven battery and then touched 90 per cent and is claiming a net post-taxation profit of Rs725 million.
“Extension of jetty by 300 metres, installation of one more crane and repair of the existing two, repair of 4.5km long conveyor belt and two coke oven batteries plus construction of a new one and some work at the steel converter plant will cost somewhere from $200 to $250 million in the next 18 months or so, but it will increase the production capacity to 1.5 million tons and keep the plant running for the next 10 to 12 years,” Pakistan Steel Chairman Lt-Gen (retd) Abdul Qayum informed a group of journalists on Monday.
The journalists from print and electronic media went through various shops of Pakistan Steel on Monday to see for themselves the state of utter disrepair of cranes at the jetty and machines at the plants, particularly coke battery oven. The idea was to make the media persons realize the importance and urgency of repair and maintenance at the earliest.
The Pakistan Steel management is sending a detailed report on repair and maintenance to the government, urging them to take a quick decision before “something terrible happens at jetty crane or coke battery oven”. In the office room where the PS chief was with his entire team of senior management, the journalists were informed that Pakistan Steel had signed an agreement with the Transparency International and was bound to observe all rules and conditions and was open to inspection. Moreover, Pakistan Steel also observes the rules and conditions laid down by the Pakistan Procurement Authority, a government institution. Mr Qayum and his team took the question and an observation in stride when told about the doubts being expressed in media on possibility of leakage, siphoning and commissions in the job work that could involve as much as Rs18 billion.“We are not angels. We are human beings and we offer ourselves to scrutiny, checks and counter checks and inspections,” a senior officer with about 30 years job in Pakistan Steel remarked.
The PS chief, his team of senior management, engineers and technicians and workforce looked confident of pushing through all obstacles and hurdles to operate Pakistan Steel at maximum capacity. “We have a stake in operations and maximising profits because we get two to three bonuses in a year,” Ikhlas Ahmad, an operator at the coke oven battery, remarked. He then went on to explain the stakes the employees have. There is a Steel Township with a population of 150,000 and has about one dozen educational institutions, including primary and secondary schools, colleges for girls and boys, a cadet college, a computer science institution, a 100-bed fully-equipped hospital with all relevant services, recreational places and playgrounds. Only a month ago all these people were demoralised and confused and a large number of them had sought golden handshake offer after the privatisation deal in April.
“The Supreme Court judgment on June 24 that annulled the privatisation deal of Pakistan Steel has infused a new life and confidence among the workforce who were totally demoralised and confused for almost a year as everything looked tentative and indecisive so much so that even children had stopped taking interest in their games and studies,” Ikhlas Ahmad said.
The PS chairman and his team did not agree with the impression that Pakistan Steel technology is outdated and obsolete. Mr Qayum said that 65 per cent of world steel was being produced on the same technology. Only 35 per cent steel is produced on electric arc furnace where cheap electricity is available in abundance.
“It is for the government to decide on the future status of Pakistan Steel whether it is privatised or take up other options,” the PS chairman explained. But his emphasis was on early and quick commencement of the repair and maintenance work “before anything terrible happens”. An accident at the coke battery oven, at jetty or at some other plant shop can cause loss of precious human lives and bring the mills to halt for a very long period.
At the jetty, some 4.5km away from blast furnace, the journalists were informed that Pakistan Steel pays Rs240 million rent a year to Port Qasim. It is 300 metres long and its two cranes were installed in the early 1980s. Now the jetty and two cranes are in state of total disrepair and were in dilapidated condition. “The Port Qasim Authority is spending Rs700 million to keep the jetty and cranes operational,” Mr Qayum said. His proposal is to further extend the jetty by 300 metres, install a new crane and repair the two cranes. One crane should be kept for backup support in event of any contingency.
At present one of the two batteries at coke oven is not functional. Some repair work is already on. Pakistan Steel wants the quick repair of both these batteries at the earliest and also the installation of a third battery. The idea is that two batteries will work and the third one will give the backup support in contingency or when repair and maintenance work is taken up for any battery.
At the steel converter plant too the Pakistan Steel management wants some work to be done. “Pakistan Steel infrastructure is for three million tons,” one of the officials explained in the briefing. Along with repair and maintenance some additional facilities can help in taking up the plan capacity to three million tons. Then the mills will meet the domestic requirement to the extent of 50 per cent. The government can then decide what to do with Pakistan Steel.
The Pakistan Steel chairman and management were asked if they feel threatened from the upcoming Saudi project Al Tuwairqi in their immediate neighborhood. Al Tuwairqi had won the controversial privatisation deal of Pakistan Steel in April. It was annulled by the Supreme Court on June 24. The same group has been given a 220 acres plot on rental lease for 60 years by Pakistan Steel to set up a billet plant. The government has declared the Al Tuwairqi plant as the export processing zone. It means that the sponsors will enjoy the facility of duty-free import of machinery and equipment and raw material. Under a special SRO, the government has allowed the new project to export 100 per cent products.
“Al Tuwairqi project is based on electric arc furnace in which electricity is the main input,” explained an engineer of Pakistan Steel. For the next few years electricity availability will remain a question mark for the new project.
