Steelmaking comes to a halt in Balochistan

KARACHI: Thriving smuggling has wiped out steel bar manufacturing in Balochistan rendering thousands of workers jobless.

In a letter Pakistan Association of Large Steel Producers (PALSP) Secretary General Syed Wajid Bukhari on Monday informed Prime Minister Shehbaz Sharif that over 80pc steel bars sold in Balochistan were coming from Iran through smuggling, misdeclaration and under-invoicing.

Due to weak vigilance by the security apparatus, the smuggled steel is now reaching out to Lahore and Karachi as well as other cities.

Mr Bukhari said around 500,000 tonnes of steel bars were being smuggled into various parts of Pakistan from Iran and Afghanistan, thus giving a crippling blow to the local manufacturers.

The arrival of steel bars through illegal channels was 10 per cent of the total steel being produced in Pakistan. However, this menace is causing a revenue loss of Rs25 billion to the national exchequer annually, he claimed.

He raised concerns over the implications this smuggling could bring before the country, particularly regarding the issues like money laundering, as Pakistan and Iran do not have any formal banking channel for this purpose.

He claimed that in March large trucks/trailers carrying smuggled Iranian steel were caught in Lahore by the Customs Department and cases were lodged against them. He added that a truck full of smuggled steel was confiscated near the Chaman border in the first week of this month as well.

Despite repeated requests to the government to deter this unlawful activity by taking effective measures, no steps have so far been taken to control this illegal activity, he deplored.

He suggested the government that the import of steel should be allowed only through sea routes to effectively counter the threat posed by smuggling.

Mr Bukhari said the local industry was already struggling in the wake of the massive currency depreciation and high financial and input costs. He added that the unchecked inflow of smuggled steel has created survival challenges for the industry.

The production activity has come to a halt due to a shortage of raw materials and many units are working on a small fraction of their capacity, he claimed.