pkpatriotic
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Costly iron import for PSM
Mysteries are two-a-penny (or rupee) in a country where nothing is ever what it seems to be at first sight. For reasons beyond reason we are spending Rs20 billion every year importing iron-ore when there is a locally mined and easily available alternative.
It is our old friends at Pakistan Steel Mills that home of transparency, accountability and all-around good business practice that are host to this latest puzzler. This newspaper had asked two questions of the new PSM chief executive, Had the PSM chosen to import iron-ore at higher rates rather than use the local product because of the backhanders that would be paid and how could the additional expense of Rs20 billion be justified? The new CEO said that the policies of his predecessors had been reversed in this matter; and that all was now back on track as an order had been placed with local suppliers for 25,000 metric tonnes, with an order for a further 30,000 in the future.
In terms of ore-purchases this is little more than loose change, and according to ore-traders and mine-owners these tiny purchases represent no more than two per cent of what is available. Local ore is around 30-40 per cent cheaper than imported, but the previous management of the PSM had excluded local providers from the purchasing process to the surprise of nobody familiar with the workings of this corrupt behemoth. It would appear that this scam contributed in no small measure to the bankruptcy of the PSM, and dates back many years.
The details are complex, but France and Iran seem to have been the biggest winners and the miners of Balochistan the biggest losers. We are now in a position where foreign suppliers are refusing to send ore to us because of laxity in our payments to them, but we are not purchasing locally in any quantity and the PSM runs at the bottom end of its output capacity as a result. We have iron-ore reserves sufficient for 20-30 years. It is to be hoped that the new management of the PSM give urgent consideration to the beneficial exploitation of indigenous resources before further billions are wasted.
Mysteries are two-a-penny (or rupee) in a country where nothing is ever what it seems to be at first sight. For reasons beyond reason we are spending Rs20 billion every year importing iron-ore when there is a locally mined and easily available alternative.
It is our old friends at Pakistan Steel Mills that home of transparency, accountability and all-around good business practice that are host to this latest puzzler. This newspaper had asked two questions of the new PSM chief executive, Had the PSM chosen to import iron-ore at higher rates rather than use the local product because of the backhanders that would be paid and how could the additional expense of Rs20 billion be justified? The new CEO said that the policies of his predecessors had been reversed in this matter; and that all was now back on track as an order had been placed with local suppliers for 25,000 metric tonnes, with an order for a further 30,000 in the future.
In terms of ore-purchases this is little more than loose change, and according to ore-traders and mine-owners these tiny purchases represent no more than two per cent of what is available. Local ore is around 30-40 per cent cheaper than imported, but the previous management of the PSM had excluded local providers from the purchasing process to the surprise of nobody familiar with the workings of this corrupt behemoth. It would appear that this scam contributed in no small measure to the bankruptcy of the PSM, and dates back many years.
The details are complex, but France and Iran seem to have been the biggest winners and the miners of Balochistan the biggest losers. We are now in a position where foreign suppliers are refusing to send ore to us because of laxity in our payments to them, but we are not purchasing locally in any quantity and the PSM runs at the bottom end of its output capacity as a result. We have iron-ore reserves sufficient for 20-30 years. It is to be hoped that the new management of the PSM give urgent consideration to the beneficial exploitation of indigenous resources before further billions are wasted.
