ISLAMABAD: The Economic Coordination Committee (ECC) of Cabinet has directed Ministry of Industries and Production (MoI&P) to bring viable plan for Pakistan Steel Mills (PSM) for its consideration in the next meeting, well informed sources told Business Recorder.
These directions were issued by the ECC, in its meeting held on May 7, 2024, during discussion on a proposal of MoI&P, titled “approval for disbursement of salary of PSM employees from January 2024 to June 2024 for the financial year, 2023-24 (projected).”
Industries & Production Division briefed the ECC presided over by Finance Minister, Senator Muhammad Aurangzeb that Pakistan Steel Mills was wholly owned entity of the Government of Pakistan (GoP). It started incurring losses from the year 2008-09 and its production was suspended in 2015.
Mahni made caretaker CEO of PSM
Owing to persistent losses, the government had been providing funds for the net salaries of PSM’s employees since 2013. As the production operations of PSM had been suspended since June, 2015, the entity did not have adequate financial resources to pay for the salaries of its employees.
In the wake of privatisation process of PSM, the federal government decided to retrench the PSM’s employees. So far 5,679 employees had been retrenched and approximately 3100 employees were still working. Due to retrenchment of the employees, the salaries of the employees had been reduced from Rs.360 million per month in 2020-21 to around Rs 104 million per month at present.
Moreover, the PSM had filed a petition in the Labour Court Karachi for retrenchment of the remaining 50% workforce, as according to the clause No.11-A of Pakistan Industrial and Commercial Employment (Standing Orders Ordinance, 1968) no employer shall “terminate the employment of more than 50% of the workmen or close down the whole of the establishment without prior permission of the Labour Court.”
As per orders of Supreme Court of Pakistan of May 10, 2018, it becomes obligatory on all ministries/divisions and departments to ensure disbursement of monthly salary on 1st day of each calendar month. The salary for the PSM employees needs to be released till implementation of the complete Human Resource Retrenchment Plan. In the current Fiscal Year 2023-2024, the federal government had approved budgetary allocation of Rs 10 billion for PSM. Industries and Production Division moved a summary for approval of monthly salary of PSM employees for the financial year 2023-24 amounting to Rs 1244 million. However, ECC of the Cabinet approved salary for first six months of the FY 2023-2024 (i.e. July 2023 to December 2023).
Regarding directions of ECC of December 20, 2023 Special Investment Facilitation Council (SIFC) Apex Committee on October 4, 2023 formed a Committee comprising of the caretaker minister for Industries and Production, caretaker minister for Privatisation and chief minister, Sindh to recommend optimum utilisation of PSM land either through Export Processing Zone (EPZ) or Special Economic Zone (SEZ).
Accordingly, the proposal of establishment of EPZ on PSM land was being considered by the government. As far as the dissolution of Board of Director of PSM is concerned, MOI&P was initiating the process of reconstitution of PSM-BOD. Upon reconstitution, the current Board would stand dissolved.
Industries & Production Division requested the ECC of the Cabinet to authorise Finance Division to approve the payment of projected net salary of Rs 623 million for the remaining six months (January to June, 2024) of Financial Year 2023-2024 to be disbursed according to the salary demand of PSM for every month from the already approved budgetary allocation of Rs 10 billion.
The forum was apprised that the ECC, in its earlier decision of December 20, 2023 directed the Ministry of Industries & Production to bring viable plan, with a roadmap, for Pakistan Steel Mills, to the ECC for consideration.
The ECC reiterated its earlier decision and directed the Ministry to share a definite plan in the next meeting of the ECC.
The sources further stated that the ECC reiterated its earlier decision of December 20, 2023 and directed the MoI&P to bring viable plan, with roadmap for the PSM to the ECC for consideration in its next meeting.
Copyright Business Recorder, 2024
Comments
Comments are closed for this article.