Virendra Pandit
New Delhi: Ahead of a potential US-India interim trade deal, Russia has signed an agreement with Pakistan to restore and modernise the Pakistan Steel Mills (PSM) project, marking a new chapter in cooperation between the two countries, the media reported on Saturday.
China was also in the race for getting the contract for the PSM project that was originally built with Soviet assistance.
The agreement to revive the PSM in Karachi was signed at the Pakistan Embassy in Moscow on Friday, state-run Associated Press of Pakistan (APP) reported.
The project aims to restart and expand steel production, marking a new chapter in bilateral cooperation.
During a visit to Russia, Haroon Akhtar Khan, Special Assistant to Prime Minister Shehbaz Sharif, said, “Reviving the PSM with Russia’s support reflects our shared history and commitment to a stronger industrial future.”
The PSM was originally built with assistance from the former Soviet Union in 1971, and remained a lasting symbol of Pakistan-Russia ties, It started crumbling in 2008, with thousands of new appointments and global recession among the factors for the downfall, The Express Tribune newspaper reported.
The steel mill recorded a loss of PKR16.9 billion in 2008-09, which jumped to PKR118.7 billion in five years.
Successive governments of the Pakistan Peoples’ Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N), which were n power from 2008 to 2018, had failed to efficiently run this industrial behemoth.
Later, the Pakistan Tehreek-e-Insaf (PTI) government led by Imran Khan, launched an initiative to revive it, triggering a race between China and Russia to get the contract.
Initially, the PTI government was tilted towards China and had started negotiations with a Chinese firm but the talks could not materialise.
The Russians, on the other hand, had claimed that since the project had been built by them, therefore, they were best suited to revive the sick unit.
The PSM had a cumulative profit of PKR9.54 billion up to financial year 2007-08 during the tenure of the then president Pervez Musharraf.
Over the next 10 years, its losses continued to swell, reaching PKR200 billion at the end of its tenure on May 31, 2018.