Non-implementation of meeting decisions: TIP threatens to declare PSM operations as non-transparent

Transparency International Pakistan (TIP) has threatened to declare the ongoing operations of Pakistan Steel Mills (PSM) as non-transparent, if mutually agreed decisions are not implemented in letter and spirit, official sources told Business Recorder.
TIP has informed the PSM management that its "marketing department is not following the decisions taken at a joint meeting wherein it had been decided that the price of 150 mm billets will be kept the same as that of the 75/100 mm billets," sources quoted TIP as saying in a letter written to the Chief Executive Officer (CEO) of PSM.
It had also been agreed that in case the billet of 150 mm size is produced it will be offered to all the registered rolling mills that are using 75 mm, 100 mm and 150 mm billets on first come first served basis to ensure transparency, without favouring certain rolling mills.
"If the decision taken at the meeting is not implemented in letter and spirit, TIP will withdraw and declare PSM not transparent in its dealings", sources quoted TIP as saying in the letter. According to final minutes of the meeting held between Chairman PSM and TIP on February 3, 2010 in Karachi, it had been decided that the cost of 150 mm billet will be increased so that the price of all sizes of billets will be the same with immediate effect.
In case 150 mm billet is produced, it will be offered to all of the interested 65 registered rolling mills on first come first served basis. Adil Gilani had pointed out that the marketing department was favouring one downstream industry by manufacturing cast billets of 150 mm size only. PSM''s representative explained that due to the shortage of raw material, the steel mills was running at 30 percent of its capacity and was suffering losses in manufacturing billets of all sizes, which was greater for 75 mm and 100 mm billets.
He suggested that steel mills should stop production of billets of all sizes, and manufacture more profitable products. In case billets of 150 mm were manufactured by steel mills they should be offered to all manufacturers who would reduce the size at their own cost.
It was decided that Pakistan Steel would offer these billets to each of the registered rolling mills which would show interest to purchase it, on a rotational basis. This policy will be uploaded on to the Pakistan Steel website. The Chairman (now former) agreed to the suggestion and directed the GM Marketing to adopt this policy.
It was pointed that Pakistan Steel was offering a discount of Rs 500 to Rs 850 per ton in the marketing price of 150 mm billets as compared to 100 mm and 75 mm billets respectively. The General Manager, Pakistan Steel, Iftikhar, clarified that it costs PS less in making the 150 mm billet than 100 mm and 75 mm billet--a saving which is passed on to the purchaser.
It was suggested by Adil that at one time in the past the prices of all sizes of billets were kept the same and a similar policy should be followed at present. This would also increase the revenue of PS. The Chairman agreed to the suggestion and asked the Director Marketing to put up the case for his approval immediately.
Gilani stated that they had received complaints that the marketing department were not renewing purchasing contracts of customers and delaying them on one pretext or another. He informed the participants that it had been proposed earlier that these renewals would be computerised and automatically renewed.
A.K Lodhi, Director, Finance, PS also took strong exception to this complaint and advised G M Iftikhar to look into the case and address it. He also stated that the treatment meted out by PS officials to suppliers and purchasers was deplorable and needed drastic improvement.
The Chairman also agreed that all processes should be computerised and there should be limited dealings between PS staff and suppliers/purchasers. Gilani inquired about the tender for purchase of coke and bulk ore. Azam Soomro, General Manager (purchase) informed the participants that the tender for the ore had already been received and the tenders for coke will be floated shortly.
Gilani asked if any changes were made to the tender document vetted by TIP. Soomro said that some minor changes were made. Gilani requested that the tender documents should be sent to TI Pakistan. Usmani directed Soomro to send the documents to TIP in the next couple of days for vetting.