Board of Directors (BoD) of Pakistan Steel Mills (PSM) Chairman Aamir Mumtaz has said that all employees of dysfunctional steel mill are being retrenched as every passing month adds a loan of Rs 2 billion.
On May 13, 2020, the Economic Coordination Committee (ECC) of the Cabinet discussed a summary submitted by the Ministry of Industries and Production (MOI&P) and directed it to resubmit the summary after reformulating it in consultation with the PSM management so that its scope could be estimated to the maximum number of PSM employees. The ECC also directed that disbursement and payment plan as requested by Finance Division may be provided by PSM/Ministry of Industries and Production. The total strength of PSM employees is 9,350 at present who will be fired. However, Chairman PSM uses the term early retirement instead of firing.
"We prefer to use the term retired early as the average age is on the higher side. The PSM Management and employees that we have heard from have said that they would all like to receive their retirement dues (Gratuity & Provident Funds, etc). They prefer to be relieved of the uncertainty and risk of not receiving these dues in future," Mumtaz said.
In reply to a question, he said, from the government and taxpayers' point of view, it is best to end this as taxpayers have so far paid over Rs 30 billion in salaries since the mill was closed five and half years ago, adding that another 20 billion are due in unpaid retirement liabilities.
He was of the view that the government capacity to continue paying salaries to PSM's employees, 2015 to date, is waning. He maintained that the people of Pakistan have already paid out enough. The mill owes over Rs 230 billion in loans to different companies, banks and the government. Every passing month adds a loan of just under Rs 2 billion to the already accumulated loans. "We are working hard to reduce the losses and renegotiate loans and address liabilities....The process will conclude as soon as it is administratively possible. All workers are being retrenched, after payment of full entitled dues. The process will kick start after receiving the required amount from the GOP," he added.
Answering another question, he said that discussions with investors are on going. The actual selection of an investor will take place through a bidding process managed by the Privatization Commission.
"However, prospective investors have indicated to the government that modernized mills require a different skills set (75% of our employees are unskilled or low skilled). The mill only has 130 engineers. The number of employees is also lower in case of modern mills. They have shared skills and qualification criteria with us, but only a small percentage from the existing pool matches. The new prospective investor, instead of confronting, a complex myriad of employee related problems must solely concentrate on the revitalization of PSM. The names of professionally competent, and consistently hard working employees, from the present workforce, would be recommended for employment to the New Investor and the other two new mills under discussion," Mumtaz concluded.
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