Karachi Electric Supply Company (KESC) on Tuesday cuts off power of the country's largest and state owned Steel producing plant-Pakistan Steel Mills Corporation (PSMC) as management was failed to pay bill. Sources said that PSMC is facing severer financial crisis and unable to pay its several dues including electricity bill for the month of February 2012 claimed by KESC, resulted in discontinue of electricity on Tuesday evening.
They said that KESC sent electricity bill worth Rs 210 million on March 14, 2012 to Pakistan Steel with due date of March 20,2012, however the PSMC management failed to pay bill till March 27 and after sending a notice of disconnection, KESC has cut-off the power to the state owned steel producer. Sources said for the second time during the last six months, KESC has disconnected power to PS due to non-payment of bill. Previously, in November 2011 KESC cutoff PSMC's electricity on non-payment of bill.
Pakistan Steel will face millions of rupees losses after power cut-off as operation of Cold Rolling mills and Hot Rolling mills has come to halt with this move. Approximately, PSMC will suffer a loss of Rs 120 million per day, sources said. PSMC is already working on very low capacity due to shortage of raw material followed by financial crunch and the current action taken by KESC will increase losses of mill, they added. Sources said that mismanagement has resulted in the discontinuation of electricity as top management has failed to make a comprehensive plan for the mill in absence of government's financial support. PSMC management is fully relying on the government's funds and waiting for financial help from Islamabad instead of improving efficiency of mill, they added.
On the other hand, PSMC management has claimed that according to sale purchase agreement with KESC bill will be sent on monthly basis; however dues will be cleared in 60 days. "Presently, KESC is our defaulter and has to pay Rs 120 million to the PSMC", a high official of PSMC said. He said that PSMC will take legal action against KESC and will also claim damages occurred due to discontinue of power.