Pakistan Steel Mills Is Proceeding to Tehran Via Dubai on December 22ND

Business Recorder reported that a four member delegation of Pakistan Steel Mills is proceeding to Tehran via Dubai on December 22nd to explore avenues of barter trade, ie, iron ore in lieu of wheat as federal government has given its concurrence.

The Board of Directors of PSM was informed on December 5th 2012 that for the last 10 days of October 2012, the Capacity Utilization had declined to 8% as there was no coal after 5 months and twenty days. PSM was operating on 12% to 4% CAPU which was reduced due to non availability of coal. 

The delegation will include two board members, Engineer Mr Jabbar Memon who is also chairman of price committee and Mr Syed Nayyar Hussain Haidar, CEO PSM, Major General Muhammad Javed and Mr Shamsi Hasan general manager of Bulk Material Department.

The sources said that the committee is empowered to negotiate, procure as well as fix suitable price in addition to finalizing freight arrangement and payment mechanism. According to Pakistan embassy in Tehran the delegation will hold meetings with the Iranian companies on December 23 and 24 in Tehran.

Pakistan embassy in Tehran has refused to fund the official delegation saying that embassy receives funds from Dubai which are barely sufficient to meet its day to day operations. In case of high level delegations, the concerned departments transfer/remit funds. Therefore the PSM delegation has to incur expenditure on hotel and transport from its own resources.

The sources said that Secretary Production goes to Karachi almost every week on official visit to meet his family and is not part of the delegation. The delegation will meet with the top management of M/s Shadabe Yazd Industrial Company M/s ICIOC, M/s Imidro, M/s Ehya Sepahan Mining and Industries Complex Company and M/s Asre Poya Industry.

The agenda of the delegation will be as follows
i) Finding possibilities for barter trade (wheat /met.coke vs iron ore)
ii) Payment mechanism
iii) Price mechanism
iv) Contract enhancement and finalization of payment schedule or mechanism of Asre Poya and ICIOC which is USD 15.5 million, 10% amount left due to US sanctions for dollar transfers and some PS financial issues.

Insiders' claim that the delegation will return empty hand as PSM has no money to pay back USD 15.5 million to the Iranian company.