Ministry of Industries and Production (MoI&P) is to share progress on revival plan of Pakistan Steel Mills (PSM) with Senate Standing Committee on Industries and Production on Monday (today).
The incumbent government submitted PSM revival plan to the Chinese leadership during the recent visit of Prime Minister Imran Khan but confusion persists in the Ministry on the mode of revival of the entity. PSM is incurring Rs 1.6 billion monthly financial losses to the national exchequer due to indecisiveness of incumbent government.
Previously, the Economic Coordination Committee (ECC) of the Cabinet had directed the Privatisation Commission to revive the "dead" entity on the basis of Public Private Partnership (PPP), which was a violation of Privatisation Ordinance, 1973. Privatisation Commission started work on the directives of the ECC. However, when Chairman Cabinet Committee on Privatisation (CCoP)/ Finance Advisor, Dr. Hafeez Shaikh expressed annoyance on the performance of PC, they expedited the process of hiring Financial Advisors to prepare revival plan of the PSM on PPP mode.
"Ministry of privatisation stated that Privatisation Ordinance, 1973 does not deal with Public Private Partnership (PPP), therefore, their Ministry is not in a position to take further action on implementation of ECC's decision regarding revival plan on PPP basis," the sources added.
Recently the PPP mode -based revival plan was replaced with a Government to Government (G to G) strategy after an exclusive meeting of PSM presided over by Prime Minister, Imran Khan. The offer of any entity for revival on G to G basis is also a violation of Privatisation Ordinance.
Insiders claim that Ministry of Industries and Production, which actually is not in favour of G to G basis revival plan, was now waiting for the opinion of Transaction Advisory Consortium. The response to first advertisement was negligible, after which PC gave another advertisement.
The Standing Committee will further discuss the progress made on the proposals for the limited revival of non-functional units as identified by the committee, during its visit to PSM on March 18, 2019.
Presently, PSM affairs are being run without any Chief Executive Officer (CEO) as Ashiq Ali who was holding additional charge of CEO has resigned. The position of permanent CEO has been vacant since April 2016. The post of permanent CFO is also vacant since January 2013 and affairs are being managed on ad-hoc basis. Positions of eight Principal Executive Officers (PEOs) and 25 General Managers are vacant.
Insiders claim that Chairman PSM who came all the way from the United States and a retired Army Officer are calling the shots and Board members are not being taken into confidence.
On June 26, 2019, the ECC was informed that PSM has not been able to pay the dues (gratuity, provident fund and leave encashment), to its retired employees outstanding since May 2013 that resulted in protracted litigation. Around 3000 employees out of total 4,682 who retired on or before December 31, 2018 of PSM filed petitions in Sindh High Court (SHC) for the payment of their outstanding dues. The court in its order of August 16, 2018 directed all concerned i.e. Ministry of Industries and Production and PC to resolve the issue of payment of gratuity, provident fund and leave encashment of the PSM employees within a period of 90 days from the date of order ie. November 15, 2018. The total outstanding dues on account of gratuity, provident fund and leave encashment of the employees retired from PSM on or before December 31, 2018 including the petitioners were Rs 17.135 billion out of which an amount of Rs 1.266 billion has been paid to the heirs of deceased employees and Rs 15.869 billion remains outstanding.
Copyright Business Recorder, 2019
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