The decision makers, who want to get rid of state units often band Pakistan Steel Mills with Pakistan Railways and the Pakistan International Airlines, forget that the mill is a mother of industries, unlike the other two which are mere services.

To many observers, Pakistan Steel — once a colossal showpiece of national vision and vigour; innovation and ingenuity; administrative élan and elegance — may end as a failed experiment. This is the feared fate of Rs25 billion modern manufacturing facility with a huge technical base that set the pace for industrial development and people’s progress..

How did PSM cover the distance from its promising and glorious beginning to such an ignominious end, within the lifespan of a single generation? The reasons are well known, extensively documented, and preserved in contemporary chronicles.

During 1986 to 2009, it operated at 72-94pc capacity; made net profits in 13 accounting years, including during two uninterrupted periods — 1992-1996 and 2000-2008; paid taxes of Rs103 billion, apart from Rs1 billion in dividend to the government, and Rs286 million towards the cost of the Quaidabad Flyover.

Pakistan Steel has, on average, trained and provided employment to about 30,000 men and women every year. In the last 30 years, it has enriched local and foreign manpower markets — especially that of the Middle East — with hundreds of thousands of technically trained personnel.

In 2003, perhaps in a moment of euphoria, or on bad advice, it paid Rs11 billion to clear sundry debts owed to creditor banks. This was an indefensible use of money for an essentially sub-profit production sized unit that could have utilised the available funds for capacity expansion and acquiring profit earning-sized production capacity.

The momentum of high productivity and profitability was maintained till 2008-9, except for a dip in 2005-6, and the PSM was believed to be permanently out of the woods and fully capable of dealing with mishaps.

Then on May 28, 2008, a bolt from the blue hit the company. A retired grade 22 officer of its audit and accounts department was reemployed and made chairman. Within a year, this person, in cahoots with a local businessman, caused a loss of over Rs26 billion — one billion more than the mill’s original cost of construction.

The havoc brought about by this duo left PSM permanently disabled. It could not purchase raw materials, pay salaries and settle utility bills. A promising and prosperous industrial unit was destroyed and left to go a-begging for bailouts from the government.

And the bailouts often came belatedly, and were structured, paid and regretfully utilised in a manner that compounded an already hopeless situation. Instead of allocating money for purchasing raw materials to keep the furnaces alive, the funds were squandered on heads that could have waited.

In 2013, Pakistan Steel’s production had dropped to 14 per cent of capacity. By January 2014, it was operating at three per cent capacity, and its losses had accumulated to Rs103 billion.

Surprisingly, after having remained below the break-even level for a continuous period of five years, PSM’s monthly salary bill has stayed nearly constant at Rs500 million..

An incidental moot point! What is the government doing to speedily bring the perpetrators of the felony to book? Or is there a chance for its retrieval, resuscitation and rejuvenation?

No one could possibly have any objection to the production of quality steel in the country, but the more privileged in the ruling elite would have reservations over the PSM’s socio-political aims. The fate of PSM has thus remained intertwined with the political progress of the nation.

There can be no peace without economic prosperity, and no social tranquility without opening up of vistas for upward movement for the struggling classes. To that end, we have to concentrate on rapid industrialisation and open the floodgates of opportunities for youngsters.

Economic policies aimed to maximise benefits for the maximum number of people, and creating equal opportunity for all, will be required in an environment of speedy industrialisation. For all that and more, immediate resuscitation of Pakistan Steel is inescapable.

Once it comes back on track, a serious programme to expand its capacity to three million tonnes will have to be undertaken. This could be followed by further in situ expansion or addition of two or three smaller capacity mills elsewhere in the country to raise our steel making capacity to around 10 million tonnes per annum.

At that level of production, we would be able to sustain 50kg per capita use of steel — to join the ranks of the developed ones with a fairly good industrial base.

The major problem lies with the ministry of production, which has had a dismal record of leadership, (meaningful) direction and (effective) control. Over the years, interference from all sorts of quarters became the norm on a free-for-all turf.

A dexterous scheme that may relieve the ministry of the burden of ownership — yet effectively keep Pakistan Steel as the people’s asset for delivering on socio-economic promises — has to be thought out. For this, a workable plan that entails minimal costs to the government is outlined below.

Pakistan Steel is a strategic national asset, and it should not be sold to private parties through a simple sale of assets. Its privatisation should proceed only after it has been restored to health.

For that purpose, an ad hoc management team comprising experts with demonstrated records of performance may be selected and given a free hand to deliver on agreed results.

In order to make PSM operational again, the government needs to make a one-time grant, equal to the purchase price of three month’s raw material inventory. The PSM should open a revolving L/C for its raw materials. The amount recouped through its product sales should be put into a special fund. This fund should remain available to finance the Mill’s operations, and as such, obviate the chances of repetition of the current crisis.

It is also but fair to expect reimbursement of money that had gone missing from the coffers of the Mill and which has since been recovered by anti-corruption bodies like the National Accountability Bureau. Retention of such funds in the treasury is not logical.

The agreement with Russia should be revived to expand the Mill’s capacity to three million tonnes and revamp the existing units. The Russians could be encouraged to join hands with a local private group of investors to bid for 26pc shares of PSM, with the share prices being fixed on the basis of either replacement costs or prospective income-per-share. And the PSM’s creditor financial institutions could be encouraged to have a debt-equity swap option.

The mill ownership and management should only be passed on to a corporate body that preferably has experience in steelmaking and which agrees to binding clauses to continue its operations as an integrated steel mill, with the readiness to make additional investment to adopt modern technology.

Lastly, Pakistan Steel employees should be asked through their unions to accept a cut in workforce and wages, which will be restored as soon as profitable levels of capacity utilisation are reached.

The writer, a retired army officer, has served in a number of industrial and commercial bodies