The management of Tuwairqi Steel Mills Ltd (TSML) yesterday announced their intention of pulling out of the country as the respective governments were seemingly not inclined to resolve their lingering issues of reduced gas tariff.
“I can assure that we won’t like to exit Pakistan but the situation is forcing us to do so,” TSML Chairman Dr Hilal Hussain Al-Tuwairqi told a press conference.
“We have only one issue that the gas feedstock tariff has to be rational as per the promises made to us in the memorandum of understanding (MoU),” he said, referring to a 2004 agreement.
Dr Hilal announced that though the TSML has not conveyed the decision to the government formally, this press conference should be taken as the official message.
He said the company will wait till the next meeting of the Economic Coordination Committee (ECC) of the Cabinet, and will exit the country in case of no decision.
The TSML, a joint venture of Saudi Arabia’s Al-Tuwairqi Group of Companies and South Korea’s Posco (formerly Pohang Iron and Steel Company), has production capacity of 1.28 million tonnes a year.
The Ministry of Industries worked out in July 2014 that the gas feedstock tariff for the TSML should be Rs123 per million British thermal units (mmbtu) based on an MoU signed by the government of Pakistan in 2004. However, the government was offering gas at Rs488 per mmbtu to the company.
