KARACHI, Sept 4: Pakistan Steel’s repairs and revamping will cost less than Rs10 billion which will be paid back within two years and keep the project running and viable for the next 15 years. This is the crux of a message conveyed recently by the Pakistan Steel management to the government in response to a query.

Sources at Pakistan Steel said 48 ovens out of 49 of coke oven batteries had been repaired. But what is needed is that two coke oven batteries should be altered completely, repairs be done in hot strip mill and converter and boiler number two be repaired in the steel making plant, which can be done in two quick successive phases.

“This investment of less than Rs10 billion can set a stage for capacity expansion to 1.3 million tons and bring value-addition to the project if and when the government decides to go ahead with privatisation,” a well-placed source said. The successive managements of Pakistan Steel have been pleading for repairs, revamping and expansion of the project for the last almost 15 years. Former Prime Minister Nawaz Sharif approved the repairs and revamping programme in 1998 but it could not be done. President General Pervez Musharraf approved a plan in 2002 that could not move ahead after repairs of blast furnace oxygen plant and boiler number one of steel making plant.

Soon after taking over as chairman of Pakistan Steel in 2004, retired general Qayum had been drawing government’s attention towards deteriorating condition of certain units, particularly that of coke oven battery. He is asking “for quick repairs before anything terrible happens” but has apparently failed to get any favorable response. The repairs and revamping were stopped halfway when the government finally decided to privatise the project which was done with “indecent haste” to quote judgment of the Supreme Court.

The government did not wait for a detailed judgment of the Supreme Court on the privatisation and in a hastily constituted and hurriedly convened meeting of the Council of Common Interest (CCI) decided to bring more than two dozen state entities, including Pakistan Steel, to the disinvestment programme.

But then the privatisation programme has come to an abrupt halt. There is no formal announcement from the government but indications are that except for a few unimportant and insignificant deals, no major transaction will be done in privatisation. This situation has warranted the implementation of repair and revamping programme.

The sources at Pakistan Steel are confident of paying back the entire investment on repairs and revamping, which is “less than Rs10 billion”, within two years period. Pakistan Steel has been identified as one of the big revenue generators in the country which gave the exchequer Rs18.6 billion in sales tax and income tax. This fact was recognised by the Central Board of Revenue chairman this week.

Within the cabinet and in the parliament there is a strong lobby which is against any investment in Pakistan Steel and is for quick privatisation. All sort of insinuations are being attributed to the future investment plan.

Mr Qayum, Chairman of Pakistan Steel, in a meeting with media at his office and in presence of all his directors about a month ago had pledged to keep investment under strict scrutiny and within the framework of universally accepted principles of transparency. Pakistan Steel signed an MoU with International Transparency to observe the rules for giving contract and procurement of equipment and machinery.

Mr Qayum’s contract term as chairman of Pakistan Steel has expired in January this year but he has been advised by the government to “continue till further order”.