Iron ore contract not approved by PSM BoD

A long-term iron ore import contract with one company has reportedly not been approved by the Board of Directors (BoD) of Pakistan Steel Mills (PSM) as the Board Price Committee (BPC) did not support the proposal, saying the new BoD should take this key decision, well informed sources told Business Recorder

The BoD, which met a couple of days ago under the chairmanship of Fazal Ullah Qureshi, agreed to the viewpoint of the BPC. Last week the committee discussed opening of 7th generation (long term) supply of iron ore against tender. After considering the position explained in the working papers the committee deliberated the scenario published in media by the representatives of the new Federal Government that the Board of Directors of several state-owned corporations would be reconstituted and new professionals will be nominated including that of PSM. 

The Chairman, BPC, explained that this being a long term contract to be valid for five years for supply of iron ore, it would be appropriate that commercial opening of bids for 7th generation of the suppliers having been technically cleared by the technical scrutiny committee should be deferred for another 15-20 days as new BoD is expected to be notified. 

The committee argued that present BPC can, however, open commercial bids for 7th generation tender in case existing Board of Directors authorised to open the bid pending constitution of the new Board of Directors/BPC. Official documents available with this scribe reveal that the BPC, accordingly, decided to defer the consideration on 7th generation tender for supply of iron ore to the Board of Directors to be reconstituted by the new government.

PSM management submitted the proposal for consideration of the Board of Directors premised on its contention that the long term contract for supply of iron ore (fine) was processed after due consideration and completing all the formalities in this regard as per PPRA rules which took about a year. 

The management maintained that procurement of iron ore on spot basis is not a secured/ assured process for procurement, in as much as every time for procurement of raw material, tender is floated in the press and after due process/completion of formalities as required as per PPRA rules, ultimately it is not sure that the bidders will be able to supply the material within the stipulated time and mechanism of price fixation also vary from tender to tender, which raises the undue questions/queries from various agencies. When contacted PSM spokesman Shahzim Akhtar said that the long-term contract of iron import will be considered by the new government. 

Copyright Business Recorder, 2013

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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