Pakistan Steel Mills (PSM) is not out of the quagmire despite exhausting half of another bailout package amounting to Rs 18.6 billion. The sources said, Ministry of Industries and Production (MoI&P) and Chairman Privatisation Commission are extremely concerned over the present state of affairs of PSM especially far low production as committed with the Finance Minister, Senator Ishaq Dar, who is ultimately answerable to the International Monetary Fund (IMF). The PSM losses and payable debt liabilities were nearly about Rs 250 billion as on August 1, 2014.
According to sources, all PSM's plants, except COBP and TPP, are not working for the past many days for reasons best known to the management, due to which the promised production target for July has not been attained and there will be no major difference in August. Targets promised for August are unlikely to be attained. PSM Chief Executive Officer, sources said, is making all out efforts to take a big delegation to Iran on the invitation of Iranian company M/s Ehyaa Sepahan which is informally represented by one of the Board members.
The following comprise a delegation; (i) Major-General Zaheer Ahmad (retired), CEO ;(ii) Wasif Mehmood, PEO( Production); (iii)Hamid Pervez APEO(commercial );(iv) Imtiazul Hasan Sahamsi General Manager( SMD/ rolling));(v) Muhammad Idrees DCE Incharge (CMD/ SPM&E);(vi) Arif Afroz S.E. Incharge (IMD);(vii) Shakeek Ahmad S.E. Incharge (TPP)/TBS) and ;(viii) Mansoor Ahmad S.E.Incharge (BMD). PSM management is of the view that the delegation will sign an addendum for Cash Flow From Operations (CFFO) shipments.
The delegation, sources claim, will explore a way forward for remittances, availability of iron ore cooking coal and manganese ore, Iranian technical expertise in repair and manufacturing capabilities/enhancement in production. The delegation has also planned to visit desulphurization plant.
The sources said, the Iranian company will invest on the delegation to get contracts from the PSM in future. This is also evident from PSM's communication with the Ministry that Pakistan Steel will bear expenses of air tickets including TA/DA, which is estimated to cost Rs 0.5 million. Boarding, lodging, travelling and other expenses in Iran will be borne by M/s Ehyaa Sepahan.
The sources said, mismanagement in PSM is still at its peak in the name of 'on spot' procurement. Procurement of iron ore from M/s Cargill through a "questionable" tender is also part of discussion in the corridors of Ministry of Industries and Production.
M/s Cargill's Letter of Credit (L/C) was opened @ $ 95 plus $ 7.5 PMT and second L/C was opened at $ 95 plus $ 14 PMT each shipment for 55,000 MT iron ore. These spot tenders were floated last year but are being processed this year, which raises questions. PSM, sources said, is facing awkward situation with respect to procurement as its Board is incomplete. Several Board members including the nominated Chairman of the Board refused to accept the position citing personal reasons. Another recently appointed Board Member M. Ashraf Bawnay, MD/CEO M/s Linde Pakistan, has also refused to accept the position.
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