Pakistan Steel Mills (PSM) Board of Directors (BoD) has directed the Mills management to expedite audit of dues of retired employees till June 2018 and come up with cash flow plan in consultation with National Industrial Parks (NIP) and put up before the Board, well informed sources in Privatisation Commission told Business Recorder.
These instructions were issued at a recent meeting of the Board, presided over by Abdul Jabbar Memon and attended by Secretary Privatisation Ifran Ali, CEO, PSM, Shakeel Ahmed Mangnejo, Senior Joint Secretary Finance, Zahoor Ahmed and ACFO Arif Sheikh, besides Directors from private sector.
CEO PSM revealed that pursuant to the PSM Board's directions in its previous meeting, the third party audit of dues of retired employees was entrusted to M/s Howarth, Crowe and Chaudhry. The firm was selected through a competitive process as per PPRA Rules; and completed audit work upto June 30, 2017.
As per the report, the dues of retired employees stand at Rs 11.2 billion. An amount of Rs 14 billion received from NIP in January 2018 has already been paid in lieu of gratuity to 842 employees through Sindh High Court. The balance amount of Rs 9.775 billion is still due and payable to the employees' who retired prior to June 30, 2017.
The Assistant Chief Financial Officer (ACFO) informed the Board that the response from Finance Division regarding interest rate on provident fund was still awaited and the auditing firm has assumed an interest rate of 10.4 per cent for 2015-16 and a rate of 9.34 per cent for 2016-17 being the highest return on eligible instruments of investment ie pensioners benefit account/ Behbood Savings Certificate. On receipt of advice from Finance Division necessary adjustments if any will be made in the authenticated statement of provident fund dues.
CEO PSM informed the Board that the retired employees were in severe distress. Several of these retired employees have died and their families are waiting for the rightful dues even after lapse of five years. He stressed that this was a humanitarian issue and the government being the owner of PSM may be requested to clear the dues of the retired PSM employees.
Secretary Privatisation observed that the Government of Pakistan (GoP) was already paying a monthly salary bill of PSM employees of Rs 380 million as a loan on humanitarian grounds. He argued that it would not be justified to burden the GoP without any concrete repayment plan or cash flow details.
He further argued that it was also not necessary to pay the liabilities in a single tranche and the payments to retired employee can be disbursed in tranches as and when funds are received by the PSM from NIP.
Irfan Ali further added that in past, summary for payment of dues of retired employees was moved by PC but the ECC agreed to payment of gratuity and provident fund of deceased PSM employees only. He further added that instead of relying on ECC or GoP funding, PSM shall concentrate on a concrete plan of cash flow based on receipts from M/s NIP and utilise it to clear the dues of the retired employees.
Senior Joint Secretary, Zahoor Ahmed and Aamir A Allawala CEO (Techno Pack) endorsed the idea that it was not necessary to pay the liabilities in a single tranche rather the payment could be disbursed as the resources of PSM permit.
The representative of Finance Division added that in the current scenario of financial crunch, GoP will not agree to finance dues of PSM employees.
CEO PSM stated that NIP revealed that its cash-flow was not predictable. It may take more than a year before the requisite funds are available to pay the dues of retired employees. He stressed that the retired have already waited too long and further delay may be unbearable for them and their families. He reiterated that the option of requesting the government for payment of outstanding dues and relying on NIP flows for payment of these dues were not mutually exclusive and may be pursued simultaneously to resolve the issue at the earliest possible.
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