Acting Chief Executive Officer (CEO), Capt. Sher Alam Mahsud (retired) said on Friday that the government will pay salaries to the employees of dysfunctional Pakistan Steel Mills (PSM) before Eid-ul-Fitr, within available financial resources.
Mahsud, who is also an Additional Secretary in the Ministry of Industries and Production (MoI&P), was given the additional charge of CEO, PSM last year in the hope that he will be replaced with a regular CEO, who has yet to be appointed.
The government was paying Rs480 million as salaries to the employees per month as loan to the PSM after approval from the Economic Coordination Committee (ECC) of the Cabinet. However, the monthly salary bill is on the decline every month with the retirement of employees.
However, according to acting CEO PSM, salaries payment mechanism has been changed and now the management had to decide how much salary will be paid to the employees within the limit of available resources.
The mill is inflicting Rs1.5 billion per month loss to the national exchequer but its revival appears to be far from becoming a reality.
On April 28, 2020, the Privatisation Commission issued a statement that Minister Privatisation, along with the PC team, is working on the ongoing privatisation plan strategy.
The Financial Advisors (FAs) appointed for PSM have submitted first draft of due diligence report, which subsequently is being reviewed by the transaction committee of PSM. First meeting to that effect was held on April 15, 2020 via video link owing to current pandemic which was followed by second review meeting on April 23. For the revival of steel mills potential partners are also being approached.
According to PSM's Corporate Secretary, PSM is facing severe financial crunch and is not in a position to generate revenue; even salary of existing employees is being paid by the government.
PSM had forwarded a draft summary to the ECC of the Cabinet on September 27, 2018 for release of funds of Rs14.659 billion to meet outstanding dues of the employees retired up to June 30, 2018. Later the amount was revised upward to Rs21.717 billion with more than 6,500 employees retired up to December 31, 2019.
Secretary Industries and Production, Abdul Latif, who was summoned by the Sindh High Court (SHC) to appear in person in a case filed by the retired employees, was not available for comments.
Finance Division has been providing financial assistance to PSM for the last many years. The financial support is provided for disbursement of salaries to the employees. During FY 2018-19, Rs5.2 billion was disbursed to the PSM on account of salaries and Rs4.8 billion in 2019-20 for this purpose. Moreover, Finance Division has also provided funds amounting to Rs1.588 billion to clear the dues of the heirs of deceased employees.
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