Ministry of Industries and Production (MoI&P) has reportedly refused to move a summary to the Prime Minister for another bailout package of Rs 9 billion for Pakistan Steel Mills (PSM) arguing that this responsibility now lies with the Privatisation Commission (PC), well informed sources told Business Recorder.
"Chief Executive Officer PSM requested the MoI&P to send a summary to the Prime Minister but Secretary Arif Azim maintained that the MoIP cannot do this. For the last one and half years, PC is moving summaries to the Cabinet or the ECC. MoI&P can only oversee day-to-day affairs as a watchdog," the sources revealed.
An insider told Business Recorder that PSM still holds an inventory of Rs 4.5 billion which is enough to meet other expenses for 10 months as salaries are being paid by the federal government. This implies that the Mills do not need a single penny from the federal government with respect to expenses except salaries. PSM is demanding Rs 1 billion per month from the federal government.
According to an insider, PSM has 40,000 tons of scrap and the price of one ton is around Rs 75000, totalling about Rs 3 billion, coke breeze of Rs 1 billion and iron ore scrap amounting to Rs 0.50 billion.
The Board of Directors (BoD) of PSM in its meeting held on November 18, 2015 approved the names of 11 professionals for induction into the Board. The names have been sent to the Ministry of Industries and Production.
The sources said provinces are being given proper representations on the PSM board. A few proposed names for PSM board are Sheikh Imran-ul-Haq (MD PSO), Javed from KPK, Engineer Daro Khan (Balochistan) , Munir Bana ( engineering industry), Sindh, Syed Nabeel Hashmi (Punjab), Aziz Nishtar (private sector).
The management of PSM recently informed the National Assembly's Standing Committee headed by Asad Umar that no land is being considered for sale at the moment, adding that a proper approval will be acquired as and when required.
The standing committee has recommended that the federal government should intervene to save PSM from further losses and work out a plan for its revival, adding that a bailout package should be reviewed instead of considering privatisation of PSM.
The PSM management, sources said, has informed the committee that a summary for immediate operation of PSM has already been submitted for consideration of the Prime Minister on November 12, 2015. The plan for revival of PSM has been taken in hand and will be submitted by December 2015.
Due to financial constraints, salaries to employees are paid as when approved and released by the federal government. Also GoP pays only net salaries, other arrears are piling up with every passing month.
The management further stated that PSM has not paid gratuity to the retired employees since May 2013. The sub- committee III of the PAC in its meeting on January 16, 2015 had directed the GoP to supply funds for gratuity of PSM employees. Accordingly, GoP has been requested to arrange Rs 3 billion to settle the gratuity dues of ex-employees/retired/died from May 2013 to June 2015. The GoP has to pay the gratuity and provident fund contribution for settlement of retired/ expired employees till PSM achieves financial viability. The funds to clear these liabilities may either be arranged by MoI&P or PSM may be allowed to sell its land for payment of employees' liabilities.
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