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History of Pakistan steel mill

After the creation of Pakistan in 1947, the Government of Prime minister Liaquat Ali Khan realized
the significance of neighborhood production of iron and steel. Initially, the dependence on imports
caused cost effective setbacks to the country in the shape of excessive import cost. The initial notion
and studies had been conceived through the Council of Scientific and Industrial Research and put
ahead the thought to the Five-Year Plans of Pakistan (1955-1960). In 1958, Soviet premier Nikolai
Bulganin supplied technical and scientific help to Prime Minister Suhrawardy concerning the metal
mills and expressing hobbies in establishing the country's first metal mills.

The project used to be comprehensively debated in the governments of Prime Minister Huseyn
Suhravardy and President Ayub Khan. The manufacturing process, grant sources of the requisite
equipment and uncooked materials, plant site, domestic ore versus imported ore, ownership
pattern, product mix and all foreign financing savings kept the mission on hold for a large time.

After 20 years of policy development and studies of PCSIR, President General Yahya Khan gave the
approval of the pointers of the state-owned scientific think tank, the Council of Scientific and
Industrial Research. Bureaucrats and scientists agreed upon a unified selection that the "Karachi
Steel Project" would be subsidized in the state-public sector, below which a separate organisation
sanctioned with the aid of the Companies Act, would be formed.

In pursuance of this decision, the Pakistan Steel Mills Corporation Limited was commissioned and
integrated as a non-public constrained corporation in a public sector in accordance with the
Companies Act of 1913, to be established in Karachi, Sindh Province of Pakistan. Contacts have been
made with the United States but the U.S. authorities showed lack of ambition and interest in the
project; therefore the studies have been sent to the Soviet Union, which took the initiatives. The
United States refused to give any type of assistance.

Finally, an agreement was once reached with the V/O Tyaz Prom export of the Union of Soviet
Socialist Republics (USSR) in January 1969. In 1971, Pakistan and Soviet Union finally proceeded to
enter into an authority’s agreement, upon which, the Soviet Union agreed to furnish techno-
financial assistance for the development of a coastal based totally integrated steel mill at Karachi.
Pakistan Steel Mills list with the state capable to produce metal (10-50Mn tons of steel) and iron
foundries locally

In 1956, the Krupp industries of West Germany offered to set up a metal mill based totally on
Kalabagh iron ore, coal and most other minerals accessible within about 11 miles (18 km). The
undertaking used to be pushed aside with the aid of the Ministry of Energy led by its minister
Zulfikar Ali Bhutto who commonplace the Soviet research instead as Bhutto preferred the thought to
set up one single good sized steel mill based a hundred percent imported metal and iron ore as an
alternative of nearby ore at Kalabagh District. In June 1966, any other West German steel firm, the
Salzgitter AG, produced ~5,000 tons of first-class steel from 15,000 heaps of Kalabagh iron ore in the
presence of some international experts, and bought it to Volkswagen. The organization provided in
August 1967 to set up Kalabagh Steel Mill of over 0.8 million lots per yr capability based on Kalabagh
iron ore and imported coal at an estimated fee of Rs. 1.55Bn, consisting of a overseas change fee of
Rs. 878Mn. The European banks supplied loans for this project, which confirms technical and
monetary viability of the project. All tries were disregarded after initiatives have been politicized
ample in the civil bureaucracy.
The Pakistan Steel Mills was once installed as a built-in metal mill beneath a programmer referred to
as Nationalization programme in the 1970s. The basis stone for this giant built-in project was laid on
30 December 1973 with the aid of Prime Minister Zulfiqar Ali Bhutto. The huge construction and
erection work of the integrated metal mill, in no way experienced earlier than in the country, was
carried out through a consortium of Pakistan construction companies under the supervision of
Soviet and Pakistani experts. Khaja Inayath Ullah was once the Director Operations & Chief engineer
of this project.

The principal manufacturing units had been built with a host of infrastructure facilities involving
extraordinary volumes of work and expertise. Component devices of the steel mill numbering over
twenty and every a big ample manufacturing unit in its personal right have been commissioned as
they have been completed between April 1981 to August 1985, with the coke ovens and byproducts
plant coming online first and the galvanizing unit last. The commissioning of Blast Furnace Number 1
on 14 August 1981 marked Pakistan's entry into the elite membership of iron and metal producing
nations. The challenge used to be performed at a capital cost of Rs. 24.7Mn. The completion of the
metal mill was formally launched by way of President General Zia-ul-Haq on 15 January 1985.

Soviet scientist Dr. Mikhail Koltokof flew to Pakistan and settled in the United States of America to
furnish training to Pakistan's technical staff. Engineer Niaz Muhammad and substances scientist
Wahab siddiqui acquired education in Soviet Russian and educated hundreds of scientists and
technical staff. Their inspirations and improvements led them to earn the absolute best award from
Pakistan, and also from Soviet Union. The Government of Pakistan conferred them with Pride of

Pakistan Steel Mills no longer solely had to construct the predominant production devices for 2.2
MTPY, but also a host of infrastructure services involving unparalleled volumes of work and
expertise. Component devices of the steel mills numbering over twenty, and each a large sufficient
manufacturing facility in its very own right, have been commissioned as they have been executed
between 1981 and 1985, with the Coke Oven and Byproduct Plant coming on circulate first and the
Galvanizing Unit last. Commissioning of Blast Furnace No.1 on 14 August 1981 marked Pakistan's
entry into the elite club of iron and metal producing nations. The project used to be not achieved at
a capital value of Rs.24, seven hundred million and commissioned for production of 1.1 MTPY. Due
to its infrastructure and huge growth capacity, it is difficult to determine the modern fee of property
of Pakistan Steel Mills, whilst others approximating the business belongings attaining to then vary
from Rs. 72.5Bn to Rs. 100Bn of total value. By estimating, which includes the heavy machinery,
dividends, facilities, and external and interior assets, the market charge of the land of the Steel mills
are exceeding to the quantity of Rs. 125.5Bn, as per the government estimates in opposition to the
market value of Rs 945 billion as on 2006 investigation through a plausible bidders who used to be
withdrew from the bidding manner for reason not known.

The completion of the metal mill was forced to quit due to liquidity crises and formally launched
after 12 years by the then-President of Pakistan General Muhammad Zia-ul-Haq on 15 January 1985.
Pakistan Steel today is the country's greatest industrial undertaking, having a manufacturing
potential of 1.1 million heaps of metal and no longer executed to its lay-out sketch of 2.2 MTPY in a
length of forty years (1973 to 2013).

Pakistan Steel Mills are one of the enormous and gigantically improved industrial complexes in the
usa that is located at a distance of forty km Southeast of Karachi at Bin Qasim near Port Muhammad
Bin Qasim. It was determined to be an ecologically preferable location, alongside a tidal creek and
having a wind route away from the metropolis of Karachi.
Pakistan Steel Mills is unfold out over an place of 18,660 acres (75.5 km2) (about 29 square miles (75
km2)) which include 10,390 acres (42 km2) for the important plant, 8,070 acres (33 km2) for the
township and 200 acres (0.8 km2) for the a hundred and ten MG water reservoir.[4] In addition it
has leasehold rights over an vicinity of 7,520 acres (30 km2) for the quarries of limestone and
dolomite in the Makli and Jhimpir areas of Thatta district.[4] It is one of the biggest industrial
complicated in Pakistan as properly as in South Asia and due to its sizable expansion, the steel mill
has its very own academic amenities (see Pakistan Steel Cadet College and Pakistan Steel Institute of
Technology), housing and residential programmes, parks and recreation facilities and police services
aside from the provisional authorities.

Due to its importance, the metal mills observed a strict environmental policies regulated via the
Environmental Protection Agency (EPA) of the Ministry of Environment (MoE). All fitness safety and
healthy working surroundings continuously regulated below a designed system. Pakistan Steel Mills,
besides its core activities, has accomplished a lot in making the environment in and around Pakistan
Steel inexperienced and beautiful via the addition of three unique projects; the Quaid-I-Azam Park;
The Quaid-I-Azam Cricket Park; and the Quaid-I-Azam Beach. The Quaid-I-Azam Park, which spreads
out over an area of 45 acres (0.18 km2), consists of a series of six interconnected lakes, lush
inexperienced lawns and grassy terraces, colourful flower beds, fountains, life-size steel-made
models of wild and marine animals, a strolling track, a chicken sanctuary and mini-zoo, as well as a
kid's play and leisure floor and boating facilities. The steel mills also active in sports activities
development and additionally has a soccer crew Pakistan Steel FC that currently competes in the
Pakistan Premier League.

Privatization of metal mills: Since its foundation, the metal mills has been underneath the
management of government-ownership and strictly put underneath the shut coordination of civil
bureaucracy. In 2006, Prime Minister Shaukat Aziz decided to integrate the steel mills underneath
the intensified programme, known as the Privatization Programme. When the news reached to the
country, amid demonstration and spontaneous protest started to take vicinity towards the
government of Shaukat Aziz and sparked prolonged debates in parliament, which contributors of the
opposition walked out of in disgust

The consortium involving Saudi Arabia-based Al Tuwairqi Group of Companies submitted a

triumphing bid of $362 million for a 75% stake in Pakistan Steel Mills at an open public sale held in
Islamabad. The consortium together with the Magnitogorsk Iron and Steel Works (Russia); the al-
Tuwairqi Group of Companies (Saudi Arabia); and the Arif Habib Securities (Pakistan) paid a total Rs.
21.6 billion ($362 million), or Rs.16.8 per share, to take control of Pakistan's biggest steel
manufacturing plant. Tuwairqi Group of Companies, one of the Leading enterprise issues in Saudi
Arabia, also launched a $300 million metal mills project at Bin Qasim. The group will set up Tuwairqi
Steel Mills (TSM), a modern steel-making plant in the southern port metropolis of Gawadar,

The whole privatization programme of high minister Shaukat Aziz got here to halt when WATAN
PARTY filed a petition under area 184 two via its Chairman Barrister Zafarullah Khan in the Supreme
Court of Pakistan vide SMC No. 9/2006 against the privatization citing irregularities in the procedure
which used to be conventional with the aid of the Chief Justice of Pakistan Justice Iftikhar Chaudry.

The Supreme Court on eight August 2006 held that the entire disinvestment process of the Pakistan
Steel Mills reflected haste, ignoring profitability issue and property of the mills with the aid of the
monetary adviser earlier than its evaluation. The transaction was once the result of a manner
reflecting procedural irregularities, said the 80-page judgement in the PSM case.
On 23 June, a nine-member bench of the Supreme Court had annulled the sale of the country’s
greatest industrial unit to a three-party consortium and had directed the government to refer the
rely to the Council of Common Interests (CCI) within six weeks. It had declared the $362 million
transaction with the Russian-Saudi-Pakistan traders as null and void.

Authored by using Chief Justice of Pakistan Justice Iftikhar Mohammad Chaudhry, the judgement
said the whole exercise reflected a haste by the Privatisation Commission (PC) and the Competitive
Committee on Privatisation (CCP).The PC had processed 30 March closing report of the monetary
adviser the equal day and an assembly of the PC board and a precis had additionally been prepared
the same day when a six-week time used to be mandatory to look at and repair a fair reference price
for approval through the CCOP.

Nationalization: The privatization had the disastrous consequences on steel mills, and it was once
lost by using the personal quarter due to their incapability to run such giant large-scale operations of
steel mills. Under personal sector, the steel suffered loss in its net well worth and declining of
producing capability of the metal mill. The Economic Coordination Committee (ECC) used to be
pressured to approve a bailout package deal after the private sector; the Tuwairqi Steel Mills pulled
off its investment from metal mills rather established every other metal mill enterprise to compete
towards the steel mill.

Despite all its problems, the steel mills are a paradigmatic organization and would instead see itself
run into the floor than mistreat its lengthy standing employees. In the midst of all the troubles that it
is facing, the mill began issuing letters confirming their jobs and start producing the heavy metal and
iron materials. After leading to an infernally long protest and incapacity proved by means of the non-
public sector, the government of Prime Minister Yousaf Raza Gillani activated the nationalization
programme after accepting the recommendations, in spite of protest lodged by means of the
Finance minister Abdul Hafeez Shaikh.

In 2011, the steel mill was once put beneath the management of government-ownership, increased
and re-structured the board of directors would be restructured and expanded, from the
contemporary nine to twelve participants as nicely as approving every other bailout plan. In rely of
weeks, the private-sector voluntarily passed over the operations of metal mills to government-
ownership management, a pass that was once extensively liked in the public society and workers'
unions. Since below the government-ownership, the metal mills infrastructure and reachable
capability was once restructured and expanded. In 2012, Ukraine introduced to provide the
technological improvement and help in restoration of raw materials furnish chain after viewing the
overall performance of metal mills. The Ukrainian Ambassador quoted, "for primary operational
gadgets of Pakistan Steel Mills is remarkable". The Ambassador of Ukraine Volodymyr Lakomov said
that Ukraine is keen to make business relationship with Pakistan and the steel mill PSM will be a
"symbol of friendship" between the two countries.