Financial woes: PSMC says it cannot offer BSOS

With Rs 41 billion financial accumulative losses and Rs 38 billion liabilities, Pakistan Steel Mills Company (PSMC) has informed the federal government that it is not in a position to offer Benazir Stock Option Scheme (BSOS) for giving its employees 12 percent shares.
Sources said PSMC conveyed its unavailability to follow the federal government directive for offering 12 percent shares to its employees in a Privatisation Commission meeting and forcefully pleaded to the authorities concerned that they should not force it for any option like BSOS. PSMC is one of the short-listed public entities which have been directed by the government to give 12 percent shares to their employees. The basic idea of exercising BSOS was to empower employees of the public sector entities and make them a partner in their progress and growth. Other than PSMC many other short listed companies are also resisting the government move mainly on financial grounds. With the exception of a few companies like OGDC and PPL, majority of short-listed companies have huge losses and they are not in a position to follow the government advice to pay billions to their employees under BSOS.
The company report claimed that its monthly overhead charges are over to Rs 1.2 billion and now management was making desperate efforts to curtail unnecessary expenditure to overcome financial problems. The company is putting in action a plan to cut down expenditure. The company is also undertaking a number of initiatives to enhance its production and produce high quality coke by the end of current month. PSMC informed the authorities that the company losses were mainly due to wrong decisions of the management during the last three years and now with clear guidelines for a turnaround, the management is depending on local ore.
Its management has given a commitment to the federal government to turnaround the company and take and raise its production from existing 34 percent to 62 percent of capacity by December 2011. It also plans to use local iron ore to achieve the goal of turning this huge loss-making entity into profit-making one in shortest period possible. Over the years, PSMC has been the worst victim of nepotism, loot and plunder. A number of inquiries conducted during the last one year confirmed corruption of billions of rupees and its main accused are cronies of top officials, some of whom are now behind the bars on corruption charges.