India’s close ally now growing closer to Pakistan, revives special agreement on…, will it affect…?
New Delhi: What could be bad news for India is that Russia is getting closer to neighbouring Pakistan. Both countries have recently signed an agreement in Moscow to restart Pakistan Steel Mills (PSM). According to a report by news agency PTI, the agreement, which was signed at the Pakistan Embassy in Moscow, is the beginning of a new friendship between Moscow and Islamabad. Notably, Pak’s close ally China was also in the race to restart PSM, but the deal has been finalised with Russia. The steel mill was built with the help of the Soviet Union.
What Is The Aim Of The Project?
The main aim of the project is to revive and expand steel production in Pakistan. Special Assistant to Pak Prime Minister Shehbaz Sharif is on Russia visit. He stated that ‘Restarting PSM with the support of Russia reflects our shared history and our commitment to a strong industrial future.’
The PSM was built by the Soviet Union in the year 1971, and it was a symbol of friendship between Russia and Pakistan. The PSM started weakening back in 2008 due to new appointments and economic recession around the world. During President Pervez Musharraf’s tenure, PSM made a profit of PKR 9.54 billion till 2007-08. The steel mill suffered a loss of PKR 16.9 billion in 2008-09. The losses increased to PKR 118.7 billion in the next five years. The loss reached PKR 200 billion in 2018.
What Was The Reason That Shattered PSM?
From 2008 to 2018, the governments of Pakistan Peoples Party (PPP) and Pakistan Muslim League-Nawaz (PML-N) came to power. But they were unable to run this big industry properly. Later, Imran Khan’s PTI (Pakistan Tehreek-e-Insaf) government tried to restart it. There was a competition between China and Russia to acquire it. Initially, the Imran Khan government was inclined towards China. They had also started talks with a Chinese company . But things did not work out. On the other hand, Russia said that since they had made this project, they are the best ones to fix it.
Between 2008 and 2018, the Pakistan Peoples Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N) alternated in power. The government was unable to run the PSM properly. Later, Imran Khan’s PTI (Pakistan Tehreek-e-Insaf) government tried to revive it, and witnessed a competition between China and Russia to acquire the contract. Later, the Imran government inclined towards Beijing and initiated talks with Chinese companies, but this didn’t work out well.
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