Pakistan Steel Mills' (PSM) production came to a complete halt on Friday due to low gas pressure. Sources told Business Recorder that after achieving some 2 percent production capacity in the previous months, the country's largest steel producing plant once again faced zero production due to non-availability of required gas. PSM spokesman Shazim Akhtar also confirmed that the production at Pakistan Steel Mills hit zero level owing to low gas pressure.
"The existing pressure of less than 0.9 kg/cm2 and flow of 12,000 m3/hour is not sufficient to produce any product, while irregular starting and stopping of huge Blast Furnaces is not only leading to their complete stoppage but has skulled all ladles except two of the total 19 which handle hot metal," he added. He said this was a very serious situation, as minimum pressure of 3 kg/cm2 and flow rate of 28,000 m3/hour was required for any production.
He further said that the PSM management from the last few months had been making efforts towards bringing production at break even level in order to reduce losses, however, the sudden low gas pressure had created new challenges for the management. "The concerned authorities should take serious notice of low gas pressure from SSGC, as the reduction will directly affect the major plants ie Blast Furnace and Steel Converters and might even damage these beyond redemption," he added. In April last year, the Economic Co-ordination Committee (ECC) of the Cabinet approved a Financial Restructuring Package or Bailout Package amounting Rs 18.5 billion for the state-owned largest steel producing plant for payment of salaries and procurement of raw material.
However, despite getting the amount, PSM was facing difficulties to meet the targets set in the business plan submitted by the PSM management and accordingly approved by the ECC. As per business plan, the plant was required to achieve 77 percent production in May 2015, however, its actual production was less than 25 percent. In addition, the mills' plant is outdated and needs billions of rupees for a complete overhauling to avoid any incident and achieve maxim production capacity. For the last few years, the plant is not being maintained properly due to insufficient funds, while capital and planned repair work has also been neglected. The PSM management has also asked the federal government for another Rs 6.4 billion bailout package, which is yet to be approved.
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