THE threats by Tuwairqi Steel Mills Ltd to uproot their investment and move it to Saudi Arabia if an agreement on gas supply is not reached quickly ought to be taken more seriously than they are being taken currently. The project’s requirements are large, and admittedly this is a time of gas shortages in the country and every decision on incremental allocations needs to be weighed carefully.

But options other than complete dismissal of their case are available. In other situations, where gas claimants are loud but their claims not as strong, the government has gone the extra mile to make arrangements that satisfy the claimant without adversely impacting the allocations granted to others. The key example is the CNG sector, and the new arrangement to allow CNG stations to import their own LNG and sell it in the market. Given the will, the government can no doubt find a similar proposal for TSML that can satisfy their needs for feedstock gas without eating into others’ allocations or creating a large subsidy bill.

Reportedly, many members of the cabinet, and those in attendance at the Economic Coordination Committee, are willing to show flexibility in searching for a resolution. The government should show more seriousness when dealing with one of the largest foreign investments in the country in over a decade, especially in an area as crucial as steel, where the country already suffers from a lack of capacity. This isn’t about TSML alone. Other foreign investors are watching the matter carefully, and if the perception settles in that doing business in Pakistan is fraught with risk resulting from the capriciousness of government decision-makers, it will have a very negative impact on future investors’ appetite for stakes in Pakistan. A way out is not impossible to find, and the government should show more seriousness of purpose is searching for a solution. The stakes are too high in this affair to merit such dismissive treatment.

Published in Dawn February 2nd , 2015

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