Ministry of Industries and Production (MoI&P) is reportedly furious at Chief Executive Officer (CEO) Pakistan Steel Mills (PSM) Major-General Zaheer Khan (retired) due to "informal closure" of the mills for the last 20 days, well informed sources told Business Recorder from Karachi. "Who is responsible for the loss and what action has been taken against them," the sources quoted MoI&P enquiring from the CEO. PSM's production is almost nil due to leakage of second blast furnace and no appropriate measures have been taken so far, the sources added.
According to sources, Minister for Industries and Production, Ghulam Murtaza Khan Jatoi and Secretary Industries, Raja Hasan Abbas have conveyed a strong message form the federal government to the CEO who promised to bring the entity to a break-even level after a Rs 18.5 billion bailout package approved by the Economic Co-ordination Committee (ECC) of the Cabinet. Chairman Privatisation Commission, Muhammad Zubair prepared the summary for allocation of Rs 18.5 billion to PSM aimed at achieving 77 per cent capacity production prior to its privatisation. According to sources, "stakeholders" comprising officials and private sector continue to engage in spot purchasing.
"PSM is facing status quo as nothing has changed despite hiring another top former army officer," said an insider on condition of anonymity. Minister for Industries and Production who is answerable to Prime Minister and the Parliament had enquired from the CEO PSM on October 10 as to when the mills will restart operations; he was told that the leakage in the second blast furnace would be rectified shortly; but nothing has materialised so far.
On October 9, 2014, PSM's spokesman Shazim Akhtar told Business Recorder "it is a routine change of one converter with another and minor leakage of blast furnace which is being taken care of and other plants are operational." On October 29, 2014 when the spokesman was asked to update on PSM affairs, he said "necessary repair of blast furnace has been done and production will resume shortly. We will achieve a 50 percent production shortly."
According to sources, incumbent CEO, Major General Zaheer Khan (retired), gave his personal guarantee to Finance Minister Senator Ishaq Dar that he would achieve production targets given in the restructuring plan. Analysts, who are closely monitoring the performance of PSM, fear that the recently approved package of Rs 18.5 billion will be siphoned off, like the previous package of Rs 50 billion.
The government has disbursed the committed amount as per plan provided by the management with the objective of converting this loss-making entity into a profitable national asset. Unconfirmed reports suggest that bureaucracy's 'Lahori group' did not consult the Ministry of Industries and Production prior to appointing new Board members with reportedly no input from Minister for Industries and Production, Ghulam Murtaza Jatoi. In September 2014, CEO PSM opposed the sell-off of country's largest industrial unit until a further investment of Rs 7 billion by the government is made to revamp and modernise it.
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