IT was a sad sight — dry grass, bare trees, disconnected ACs on the outer wall of make-shift structures of site offices, empty parking sheds, no trace of people and a mammoth modern steel plant of Tuwairqi Steel Mills Ltd standing idle.

The irony is more telling as Pakistan needs to produce high quality steel locally and mitigate risks associated with its total dependence on import.

The issue of the closed plant has re-emerged as sponsors of TSML — Al Tuwarqi Group of Saudi Arabia — and South Korea’s ‘Posco’ initiated the process of international arbitration by serving a one -month notice to the government to pay one billion dollars (approximately Rs106bn) in damages. The banks that financed the project are known to be holding meetings to assess options in order to recover their stakes. Sources in the government privy to the matter confirmed receiving the notice but did not see closure of the plant any time soon.

“I have not been explained how, but have been told that TMSLwill not be allowed to die, by powerful quarters. I am advised to ‘hang on’”, an active advocate of the steel plant commented.

Citing an unviable high cost of feedstock gas the sponsors had to shut down the plant in September 2013 barely three months after its commissioning. It was followed by a nerve-wrecking process of negotiations with multiple ministries, but the matter got stuck in the cabinet which did not find time to discuss it since Sept 2014..

During this writer’s visit to the plant at Port Qasim last week, a small maintenance team took me around major departments of the fully automated plant, and narrated the TMSL journey from the start: technical snags that were countered followed by the longest lull since the plant successfully cleared the test run at 100pc capacity in May 2013.

“If Pakistan can afford to spend hundreds of billions on metro and road projects it is a little hard to digest the wisdom of letting a prime steel plant put up by a foreign investor die to save the cost of some subsidy. At stake is not just the plant but the country’s credibility”, a senior manager of the TSML maintenance team commented.

“To me it would be criminal to waste a standing mill complex of strategic importance that can be commissioned at two months notice and produce high quality steel”.

“It would be heartbreaking to see it fall. Like others I worked on the project beyond the call of my duty. We take great pride in this plant, one I know from bolt to bolt, and live to see it running to its full capacity and expanding”, a mechanical engineer, who earlier served in several steel projects in the Middle East, said.

Last month the TMSL notice dated June 9th 2016, was sent by the law firm Fazleghani Advocates,( and signed by former Attorney General Makhdoom Ali Khan), to the federal secretary, ministry of industries and production, and copied to seven other offices that include the ministries of petroleum and natural resources, commerce and finance, along with the establishment division, cabinet division, PM’s office and the board of investment. The notice has failed to generate any response so far.

Ghulam Murtaza Jatoi, minister for industries, was out of the country but a senior official of the ministry told Dawn that they are preparing a reply to the notice. “It was not our doing”, he said referring to losses suffered by the sponsors. “The dispute was over gas price that we had little say in. It is on record that we fought the TMSL case at every level”, he added over phone.

“We understand that yet another case of litigation, when Pakistan is already tangled in disputes with Progas Pakistan and Reko Dik copper company, will hurt the country’s image but the right to all decisions are with the FM who for some unexplained reason is inflexible on the issue”, a source in the ministry of power told Dawn.

On the argument of ‘no gas availability’ because of depleting reserves his response was: “Where there is a will, there is a way”. “If natural gas supply is not possible, what stops the government from engaging with investors to help them find a solution? What upset investors most is indifference. In this case the government actually shut them out”, he told this writer on the promise of confidentiality.

There were reports of a marathon meeting of financiers of TMSL led by the National Bank of Pakistan. The NBP promised to mail their formal position but it did not arrive within the deadline. A senior NBP source told Dawn that the consortium of bankers, who financed the project, is actively looking for investors to sell the project to clear their claims.

“We expect a price good enough to pay banks off but the sponsors had to forego their equity. As far as I know Al Tuwairqi group and South Korea’s Posco have digested the financial shock but they want to avenge the blot on their reputation by dragging Pakistan to the international court”, he concluded.

Published in Dawn, Business & Finance weekly, July 25th, 2016

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