Monday, 01 September 2014
It seems that the Financial Restructuring Package or a bailout package of Rs 18.5 billion approved for Pakistan Steel Mills (PSM) in April, 2014 has failed to make the promised impact. According to a news item in the
on 27th August, 2014, government has released the fourth tranche of the package amounting to Rs 2.125 billion to the PSM for salaries and other financial needs, including procurement of raw materials. Out of this amount, an amount of Rs 1.3 billion was to be spent on the payment of salaries for the later half of June and for the month of July, 2014 while the remaining amount will be utilised for the procurement of raw materials and payment of utility bills including gas, power and water. It may be recalled that PSM chief Major-General Zaheer Ahmed (retd) had sough a bailout package from the government for the country's largest state-owned steel producing plant on the basis of certain commitments. Although, the government is releasing the amount of restructuring package as per the agreed schedule, PSM management has failed to retain the output of the enterprise as per commitment made at the time of the package. For instance, PSM's production was to be raised phase-wise, with its output to increase to 20 percent in July, 2014 and 60 percent in FY15. As against this, production was only 8 percent in July, 2014 and the current year's target was not likely to be achieved as the production was only 15 percent of the installed capacity at present. This was despite the fact that the Ministry of Finance had so far released about Rs 12 billion under the approved restructuring plan.