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PSM: problem and its solution

September 15, 2012

I AM flabbergasted after reading the revelation in the report ‘Raja resolves to make Steel Mill profitable’ (Sept 8). If the PSM cannot cater for its raw material requirement to achieve the optimum utilisation of its present capacity of 1.1 million tons per year, how then will it meet the requirement when the production is increased to three million tons a year is a very hard nut to swallow and digest.

It surprises me that I as a lay man can understand the issue and how it can be resolved, but experts and financial wizards at the helm of affairs fail to appreciate the crux of the problem and to address it accordingly.

Instead of all that money going down the drain by investment in expansion, the government/PSM should consider subsidies and investments for the enhancement of the supply of iron ore from within the country and promote iron ore beneficiation plants in the private sector so that the high grade high suphur iron ore is transformed into good quality iron ore concentrate for supply to the PSM.

This will be most beneficial to the PSM, help your own population in the backward areas to benefit and can make cheaper raw material available for the PSM. All the benefits remaining in-house instead of benefiting foreign countries and losing valuable foreign exchange.

Since all public sector organisations face the same ordeal, the overstaffing could also be a major issue draining the PSM’s profits.

Under the sword of the Public Procurement Regulatory Authority (Pepra), decisions are delayed or never taken. Production cannot wait for the completion of Pepra formalities and, therefore, it is my humble suggestion that the board of the PSM should be empowered to take appropriate decisions.