KARACHI: Production at the Pakistan Steel Mills (PSM) has come to nought this fiscal year despite availability of raw material, as low gas pressure continues to bite.

The mill’s production has been zero since June 10, 2015 because of reduction in gas pressure to as low as 0.95kg to 1kg/cm2, affecting blast furnaces and steel convertors.

As per agreement between the PSM and the Sui Southern Gas Company, the approved gas pressure is 4-5kg/cm2 to enable the mill perform normally.

The mill’s capacity utilisation (CAPU) was six per cent in 2013-14 and then reached 30pc in 2014-15 (July-May). A PSM official said the mill had enough raw material, including 130,000 tonnes of iron ore and 80,000 tonnes of metallurgical coke and semi-finished products.

The steel mill could reach 30-40pc capacity utilisation within one-and-a-half months if gas pressure became normal, he added. The official said workers had been awaiting salaries for the last four months, with net monthly expense being Rs480 million.

The mill has asked the federal government to provide Rs9.3 billion which would be sufficient till June 2016 for clearing salaries, paying bills and purchase of raw materials in case the mill is privatised by the middle of the year. The official said that workers who retired from May 2013 onwards had not received gratuity while those who retired from August and September 2015 had not received provident fund as the mill did not have any amount PF fund.

On Oct 8, 2013, the government appointed directors of the PSM’s board, but it has yet to appoint permanent chairman of the board. On April 1, 2014, the government did appoint Zafar Khan as chairman, but he could not join due to his personal engagement.

Published in Dawn, January 14th, 2016