KARACHI, May 10: What was called a “failed project, a perpetual losing concern and a bottomless pit’’ and hence auctioned off at throw-away price in June last year is now on a fast track of consolidation, operating at an average of 85 per cent plus capacity almost round the year 2006-07 and is well poised to earn Rs1.5 to Rs2 billion operational profit this year.

“We expect to earn this profit despite an additional cost of $140 million import of coke because of the breakdown of the coke oven battery,’’ said the chairman of Pakistan Steel, (Retd) General Mohammad Javed, in an interview with Dawn in his steel mills office on Wednesday.

One of the two coke oven batteries is now under repair at a cost of about $23 million by foreign contractors. The repair work is expected to be completed by the year 2009. Till then, the chairman expects the import of coke will cost $100 million. But he is confident of maintaining the production tempo to operate at 85 to 90 per cent capacity utilisation and earn profit.

With a hefty Rs11.5 billion cash balance in hand and expectation of four to five billion rupees cash flow in coming years, General Javed is confident of paying the outstanding debt of Rs7.5 billion unpaid loan by the year 2011 and also carry out critical repairs from “our own resources’’.

He wants quick repair of the electric power station with a generation capacity of 140 MW so that ``we cease to import electricity from KESC as we are doing now and instead start augmenting KESC’s supply to give some relief to the people.’’

General Javed took over as chairman in September last year from retired General Abdul Qayum for a two-year term.

He seems to be a man in a haste and wants to see the Pakistan Steel project back into business for next about 15 years after all critical repairs have been done. But he is uncertain on the future ownership of Pakistan as he replied ``I have no information” when he was asked whether he could confirm that Pakistan Steel is again on the hit-list of the Privatisation Commission.

Pakistan Steel’s privatisation proved to be one of the big scandals of 2006 when it was sold away for “peanuts and on no price at all’’ by the Privatisation Commission. This deal evoked an unprecedented outcry from all sections of the society. One of the judgments for which Chief Justice Chowdhry Iftikhar will be remembered for long is the annulment of this privatisation deal.

A no-confidence move against Prime Minister Shaukat Aziz could not get through the National Assembly, but created a lot of ripples in the national politics.

General Javed believes that a majority of the 19 chairmen of Pakistan Steel were kept under perpetual pressure by the senior and middle management, the suppliers and contractors who on many occasions used crude black-mailing tactics.

“Paupers came here and became billionaires,’’ he remarked. The persons who became billionaires from Pakistan Steel business now heap corruption charges on the management to get more benefits.

He wondered as to why corruption was considered to be rampant only in Pakistan Steel and named many national institutions to ask whether all these are corruption-free. “Retired General Shoib Bukhari, a former chairman was exonerated recently after 10 years of corruption charges,’’ he disclosed.

One of the landmark projects, Pakistan Steel had powerful adversaries from the day it was conceived. The Steel importers lobby, one of them based in Lahore, opposed the project in the decade of 50s. In 60s, when steel mills could have been set up with much less investment, was thwarted by the powerful US steel importers lobby. It was late Bhutto and his minister late J. A. Rahim who laid down the foundation-stone in 1974 at the present site.

One scandal followed the other when the project was in process of being set up till 1981. It was completed at a total cost of Rs25 billion. Then there were more scandals after it came into operation as it is based on imported iron ore and imported coal. There were scam stories when repairs started for one shop or the other. The marketing of about Rs30 billion (at present prices) of the steel products is another source of corruption stories.

No wonder than, of the 16 chairmen, who came to Pakistan Steel, in first 18 years, from 1981 to 1999, one was murdered after he was heaped upon with corruption charges and another remained in prison for several years with more than 20 charges. One of these chairmen was implicated in serious criminal offence and was bailed out. Hardly any of these 16 carry any fond memories of Pakistan Steel. And finally, the privatisation of Pakistan Steel was also a big scandal that still haunts the present government and is bound to be a big election issue.