ISLAMABAD: Tuwairqi Steel Mills Ltd (TSML) Chairman Dr Hilal Hussain Al-Tuwairqi has said if the government does not reduce gas tariff the company will have to leave the country.
He, addressing a press conference, said that the government should provide gas to the company as per the memorandum of understanding (MoU) signed in 2004. He said if the issued is not solved in next meeting of the Economic Coordination Committee (ECC) of the Cabinet, they will have to leave the country and the government should take this press conference as the official message.
The TSML, a joint venture of Saudi Arabia’s Al-Tuwairqi Group of Companies and South Korea’s Pohang Iron and Steel Company (Posco), 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.
TSML Country Head Zaigham Adil Rizvi said the impact on national exchequer would be less than Rs4 billion if the government agrees to give gas at Rs123 per mmbtu. “On the other hand, the government will draw around Rs4 billion a year in taxes if we continue production, besides other gains such as jobs, reduced import of steel, etc.”
POSCO’s Senior Executive Vice-President and In-charge Overseas Investments Hong-Soo Kim was also present at the press conference.