Federal government is unlikely to extend the contract of Chief Executive Officer (CEO), Pakistan Steel Mills (PSM), Major General Zaheer Ahmad Khan (retired) as the latter's performance is considered as appallingly poor during the last two years.
Well informed sources told Business Recorder that the government had given the financially attractive position to General Zaheer with the understanding that he would bring PSM out of the crisis and make it a profitable entity. CEO with a salary of Rs 1.5 million per month has failed to deliver on his commitment to different government decision makers including Finance Minister, Senator Ishaq Dar.
"I haven't seen any summary proposing an extension to the incumbent CEO who is retiring next month. Even if such proposal has been floated by him, it will not sail through," said one of the government officials on condition of anonymity.
According to sources, Finance Minister Ishaq Dar, Minister for Industries and Production, Ghulam Murtaza Khan Jatoi and Chairman Privatisation Commission (PC), Muhammad Zubair are all unhappy with the incumbent CEO.
PSM losses mounted to Rs 170 billion and payable debts liabilities to Rs 200 billion, totalling Rs 370 billion as on January 31, 2016 as compared to Rs 223 billion (Rs 108.5 billion losses and Rs 114.5 billion liabilities) on February 28, 2014.
Zaheer Ahmed Khan assumed charge as CEO on April 3, 2014 on a 2 year service contract at an exorbitant salary and allowance package yet the government has not held him accountable for his poor performance. PSM's losses for the year 2014-15 amounted to Rs 24.614 billion which are now increasing by Rs 2 billion per month. The Mills production is zero from June 10, 2015 due to non-payment of gas bill and financial bleeding is Rs 70 million per day which comes to a total of Rs 2.1 billion per month.
The sources further revealed that the plant is damaged due to use of poor quality iron ore and other substandard material. Some of the PSM plants like coke oven batteries and Blast Furnace (BF) are on heating mode which makes it unique in the metallurgical history of the world.
Unconfirmed reports suggest that National Accountability Bureau (NAB) has initiated a probe into the decisions taken by the incumbent CEO and his aides.
PSM is on the active list of entities which are being privatised. The government has offered Sindh government the option to purchase the entity but insiders claim that the provincial government is not serious about purchasing it until the federal government extends significant fiscal incentives. Senator Taj Haider, recently told the Senate Standing Committee on Industries and Production that the provincial government is looking for a partner.
Insiders told this scribe that the government should conduct a special audit of the bailout packages extended to the PSM during the tenure of the incumbent CEO.
"If there would a third party audit of PSM financial affairs, then mismanagement of financial affairs will be exposed. However, according to the corporate governance rules, finance department also works under the supervision of CEO so ultimate the responsibility lies with him," said the insider.
When the bailout package of Rs 18.5 billion was approved by the Economic Coordination Committee (ECC) of the Cabinet on the recommendations of PSM management it was assumed that it would be used prudently to make the mills completely functional.
The SSGC which suspended gas supply to the plant is not the only factor that led to the shut g down of the mill. Foreigners are also being paid massive fees to look after the coke oven batteries and the management has not trained any of its employees to do this job.
Prime Minister House is so far silent mum on a summary of MoI&P for another bailout package of Rs 8.32 billion for Pakistan Steel Mills (PSM) which stopped production in June last year.
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