After many rounds of plans and proposals, ultimately in January 1971 Pakistan and the Soviets signed an agreement under which the USSR agreed to provide financial and technical assistance to set up a coastal-based integrated steel mill at Karachi.

The foundation of the project was laid by Zulfiqar Ali Bhutto on the 30th of December, 1973. With the aim of “Building the Nation, Serving the Nation”, the public organization proved to be one of the most fruitful and profitable assets of Pakistan.

However, PSM entered its death zone in the year 2008, when it started incurring losses. An accumulated loss of Rs. 169 billion have been recorded in the last 10 years. In 2015, PSM owed Rs. 35 billion to SSGC (Sui Southern Gas Company, Pakistan), which led to its default, and the facility was closed by the PML-N government. The government has been paying the salaries of 14,753 employees without being at operational capacity since 2015. The number of employees was reduced to 9350 in 2019.

Now the Government of Pakistan has decided to lay off all the workers of the Pakistan Steel Mills. For now, 4544 employees are being fired by the Government, and their termination letters have been dispatched to their addresses.

The government of Pakistan has been facing severe backlash for the decision of laying off and privatization. This backlash comes from the employees of Pakistan Steel Mills and the opposition parties – especially the Pakistan People’s Party (PPP).

However, Federal Minister for Industries and Production Hammad Azhar has defended the Government’s decision saying that the “Governments have paid Rs. 92 billion for a bailout so far,” he added, “The monthly salary of a closed mill is Rs. 750 million.”

He explained that PSM owns a total of 19,000 acres of land out of which the Government is planning to sell out 1300 acres to cover up the losses incurred. A private investor will create their own organizational and management structure and will run the mill with the latest technology.

For a period of four months, 250 employees would be retained for the execution of the employees’ termination plan and other related work.

Pakistan Steel Mills is one of the biggest examples of Riches to Rags and people hope to see PSM rise and shine again. But who is responsible for all of this? The question remains unanswered!

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