ISLAMABAD: The Senate Standing Committee on Industries and Production criticised the government on Monday for its failure in coming up with a revival plan for Pakistan Steel Mills (PSM) and Utility Stores Corporation (USC) after more than a year.

The committee further noted that a cabinet member was facilitating smuggling of steel scrap from Iran to local re-rolling mills.

Committee Chairman Senator Ahmed Khan said the incumbent government was discussing serious issues at every forum including the standing committees but “there was no futuristic approach”.

It is unfortunate that the lethargic approach is not only protecting steel mafias in the country but a delay in the revival plan is also increasing the liabilities of PSM and making it less attractive for investors, Senator Khan said.

On the occasion, group of PSM stakeholders alleged that the Ministry of Industries and Production and the Federal Board of Revenue are not interested in resolving the matter.

Adviser to the PM on Industries and Production Abdur Razak Dawood and Adviser on Poverty Alleviation Dr Sania Nishtar faced a barrage of queries over ways to improve performances of respective government entities.

The committee chairman suggested that while a future policy was under consideration at the Economic Coordination Committee (ECC), radical interim arrangements can be put in place.

“We know mafia like groups are importing steel scrap through under-invoicing. One solution is to take a policy decision and allow all imports through PSM only. This will regulate import figures and even the business of re-rolling mills will become documented,” Senator Khan said.

However, there was no reply from the official side over the suggestion. The committee was informed that financial adviser for PSM will be appointed soon to suggest modes for inviting strategic investors for the steel mills.

Currently PSM stands at a deficit of Rs510 billion, of which Rs40bn was accumulated in the last 14 months.

The committee was informed that the total liabilities in terms of pension and gratuity of retired employees were around Rs15.8bn.

The committee also discussed the proposal of developing coordination between BISP interventions and USC.

Dr Nishtar briefed the committee that BISP had 5.2 million women registered in its network who are paid Rs5,000 every quarter of a year.

The committee suggested that out of Rs5,000 in the quarter only Rs2,000 worth of vouchers may be distributed to the registered persons which could be used to purchase items from Utility Stores only.

However, Dr Nishter said that different households had different expenditure requirements and fixing grocery purchases through Utility Stores is not ­viable.

The meeting was attended by Senators including Kalsoom Parveen, Aurangzeb Khan, Muhammad Ali Khan Saif, Hafiz Abdul Karim and Asif Kirmani. Chairman PSM Aamir Mumtaz, Secretary Industries Aamir Khawaja, Special Secretary Finance Qamar Hamid Khan, Secretary Poverty Alleviation Shaista Sohail and officials from FBR and Public Procurement Regulatory Authority were also present.

‘End steel imports’

Steel makers have approached the government and the parliamentary body to curb imports of steel products and scrap from Iran and Afghan under garb of some certain rules/SROs.

In a letter to Chairman Senate Standing Committee for Commerce Senator Mirza Muhammad Afridi, Pakistan Association of Large Steel Procurers (PALSP) said local markets are flooded with imports of brand new and prime steel from Iran under the garb of re-rollable scrap.

The letter noted that in Budget 2018-19, Re-Rollable Scrap code PCT 7204-4910 was inserted in schedule 1, the regulatory duty (RD) on re-rollable scrap is only 5 per cent whereas the total duty on its competitive product such as billets was 28pc.

Keeping in view of the very low price of imported re-rollable Scrap, it is suggested that RD on re-rollable scrap should be increased from 5pc to 35pc to bring it in parity with the Steel Billets and ship plates.

The association further said that all steel items from Iran and Afghanistan should be imported via sea ports.

Published in Dawn, October 22nd, 2019