ISLAMABAD: Senate Standing Committee on Industries and Production directed Ministry of Industries and Production to finalise the fate of Pakistan Steel Mills (PSM) within three months as its yearly losses have reached Rs 30 billion.
Presided over by Senator Khalida Ateeb, the Committee also directed the Ministry to appoint Chief Executive Officer of PSM to ensure running of its affairs by a competent authority instead of a Committee comprising regular and contracted employees.
Additional Secretary Incharge, MoI&P, Rashid Mehmood Langrial, stated that the Ministry is in the process of appointing a new Board and CEO of PSM, on whose land, village (Goths) have been established deliberately, but the matter is stuck with the Election Commission of Pakistan (ECP).
He said, SIFC has constituted a three-member committee comprising caretaker Minister for Industries and Production, caretaker Minister for Privatisation and caretaker Chief Minister Sindh to resolve the issue of ownership of PSM land as Sindh claims that it gave the land for Steel Mills and since the government has decided to close the Mills, the land should be returned to the province. The federal government argues that as it paid for the land hence it is its property.
Acting Chief Financial Officer (CFO), PSM, Arif Sheikh, who is on contract for the last 13 years, informed the Committee that the Board will approve audited accounts of PSM next Monday, according to which the Mills’ loss stood at Rs 29.929 billion during FY 2023-24 out of which Rs 3.449 billion were for utilities, Rs 2.113 labour, Rs 7 billion depreciation and Rs 17.570 billion financial charges of loans acquired from the Government of Pakistan and National Bank of Pakistan.
Earlier, in the financial statements of FY2022 submitted by M/s Crowe Hussain Chaudhury & Co. Chartered Accountants, PSM’s total assets were estimated at Rs 838.66 billion - non-current liabilities were Rs 108.36 billion and current liabilities of Rs 211.63 billion with accumulated losses up to June 30, 2022 estimated at Rs 206.06 billion.
According to sources, in financial statement accumulated losses up to June 30, 2021 and June 30, 2020 were re-stated as Rs 218.45 billion and Rs 203.23 billion as compared to those stated in the financial statements of FY2021. Accumulated losses up to June 30, 2021 and June 30, 2020 were shown as Rs 222.94 billion and Rs 209.23 billion, respectively.
“These controversies in the figures of accumulated losses in the past financial statements raise serious questions on the authenticity of data pertaining to accumulated losses,” the sources added.
During the meeting, members of Standing Committee argued that the matter of PSM should be sorted within two or three months.
Senator Zeeshan Khanzada said the fate of Export Processing Zone (EPZ) will be like other unsuccessful Zones, adding that since real estate business is experiencing a boom, the government should sell PSM land to any party and pay off its loans.
While discussing the implementation status of Committee recommendations, officials mentioned that PSM has approved the Temporary Relief Allowance for PSM employees at the rate of 25 per cent. However, officials couldn’t provide details of stolen items in the last 10 years and their market value.
The Committee directed PSM officials to provide details of stolen items with their market value in the next meeting. Officials added that a loss of Rs30 billion occurs annually, with a break-off cost of Rs1 billion to maintain the common batteries. The Committee urged the Ministry to decide the fate of Pakistan Steel Mills to avert these losses.
CFO refused to entertain a promotion case of a female PSM employee recommended by the Committee’s Chairperson by pointing out that since Mills’ shutdown no promotion of contract employees is under consideration.
The Senate Committee deliberated on the role, functions, and achievements of the Small and Medium Development Authority (Smeda) with officials stating that there are approximately 5.2 million SMEs in the country, contributing an estimated 40 per cent to GDP and 30 per cent to exports.
Officials mentioned that entities worth around Rs 80 million fall under the SME category, and 64 per cent of such entities are located in the Punjab Province. A total of 36 Common Facility Centres were established across the country through PSDP funding; however, many of these centres have shut down due to a lack of funds. The Committee recommended the Ministry to initiate public-private partnerships for the utilization of these established Common Facility Centres.
Furthermore, the committee deliberated on the role and functions of the State Engineering Corporation (SEC). Officials mentioned that SEC, established in 1973, comprises 12 units and was once a leading organization in the public sector.
However, out of the 12 companies originally owned by SEC, 11 have been privatised, leaving SEC with only Pakistan Engineering Company in Lahore. Importantly, the present role of SEC is limited to being a liaison office between the Ministry of Industries and Production, Privatization Commission, and other government entities.
In attendance were Senator Fida Muhammad, Senator Faisal Saleem Rehman, Senator Saifullah Sarwar Khan Nyazee, Senator Zeeshan Khanzada, Senator Mohammad Abdul Qadir, Secretary for Industries and Production Rashid Mahmood Langrial and other senior officials of relevant departments were also in attendance.
Copyright Business Recorder, 2024