Finance Minister Dr Abdul Hafeez Sheikh has convened a meeting of the Cabinet Committee on Restructuring (CCoR) of Pakistan Steel Mills (PSM) on Thursday (today) to discuss the financial health of the loss-making entity, it was learnt. Sources told Business Recorder that PSM is facing a severe financial crisis, persistently seeking bailout packages from the government.
The CCoR meeting will try to determine the causes of PSM's losses. Official said that the appointment of the Chief Executive Officer (CEO), considered critical for administrative reforms, has been made to bring about improvement in the financial health of the PSM. Sources said that a request filed by the Ministry of Industries for a bailout package for PSM was turned down by the Federal Cabinet meeting chaired by the former Prime Minister Syed Yousuf Raza Gilani on April 11.
The Ministries of Finance and Production have been blaming each other for the worsening financial woes of the PSM with Industries Ministry alleging that most of the decisions taken by either Prime Minister and Cabinet or Economic Co-ordination Committee (ECC) remained unimplemented largely because of non-co-operation by the Finance Ministry.
Sources said that the Ministry of Industries stance was that an ECC meeting on December 1, 2011 recommended the following: (i) Ministry of Finance to issue sovereign guarantee of Rs 6 billion for opening of letter of credit for purchase of raw material on an immediate basis; (ii) a total bailout package of Rs 20 billion for the PSM be extended as determined in the business plan; and (iii) Finance Division to workout modalities in consultation with Ministry of Production and PSM for actualisation of business plan/bailout package.
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