Pakistan Steel Mills has been suffering a loss of about Rs 2 billion per month while its accumulative losses during the last two financial years remained over Rs 50 billion due to low gas pressure and interrupted supply chain of raw material. Parliamentary Secretary for Industries and Production Rao Ajmal informed the National Assembly during a question hour the PSM suffered an accumulative loss of Rs 25.83 billion during 2013-14 and Rs 24.66 billion during 2014-15.
"Pakistan Steel Mills has suffered the losses due to interrupted supply chain of raw material, insufficient fund position resultantly causing low capacity utilisation of the production," he said. He said the PSM''s production has gone to zero since June 10, 2015 due to low pressure of gas supply on non-payment of the bills. He, however, hoped the gas supply will be restored next month. The PSM could not achieve production targets as per restructuring plan due to delay in release of funds to clear outstanding payments and for iron ore (03 months and regular one month delay in releases of instalments) causing 04 months working capital deficit of Rs 4.5 billion requested in November, 2014 / February, 2015 but not provided) besides twice each electricity tripping in July, 2014 to June, 2015 and gas reduction in January, 2015 to March, 2015 which affected the Blast Furnaces and thus production for 06 months, he said.
The parliamentary secretary said the plant is not producing steel since 10-06-2015 due to low pressure of gas supply ostensibly on non-payment of gas bills, although arrears are accumulating since 2008-09 but gas was never disrupted while more than twice gas bill was paid in 2014-15 viz-a-viz 2013-14 while gas was never disrupted in 2013-14. Also K-Electric owes SSGC Rs 63 billion, but its gas supply is never disrupted, he said.
Supported by payments of monthly salaries of employees from June 2013 till approval of summary of restructuring of the PSM by Privatisation Commission in April 2014 the total released amounts to Rs 2.798 billion on this account, he said. After full releases against Bailout Package, the government is releasing net cash salary to employees of the PSM at Rs 480 million per month and paid Rs 5.28 billion against salaries for November 2014 to September 2015.
Due to losses sustained by the Corporation and severe financial crises, the ECC of Cabinet in its meeting held on 25-04-2014 approved the summary submitted by the Privatisation Commission of Pakistan on "Restructuring option of the PSM," he said.
The amount of Rs 18.5 billion package was approved by the ECC including therein Rs 09 billion for raw materials L/Cs with NBP while remaining 9.5 billion included salaries Rs 4.5 billion, (three months outstanding and six months till October, 2014), Utilities Rs 2.2 billion, other procurements Rs 1.4 billion, PF and Gratuity Rs 01 billion and Rs 400 million for essential repairs, he said.
The parliamentary secretary said the sale of the PSM suffered due to dumping of HR material from China, starting February 2015, affecting the PSM sales or ability to pay its bills for material and clearing L/C of NBP while piling up huge inventory of Rs 09 billion from June 2015.
Billet manufacturers were allowed a 15% RD in January 2015 and PSM was allowed only partial 12.5% RD on its HR products in end of March 2015 which allowed dumping of huge quantity of 450,000 ton alloy steel at zero duty, he said. Parliamentary Secretary for National Food Security and Research Rajab Ali Baloch informed the National Assembly that Pakistan Agricultural Research Council has developed ten hybrids of maize, sunflower, canola and fodder to increase production of these crops while efforts are underway to develop rice and cotton hybrids.
To a question, Baloch said National Agricultural Research Centre has developed a bio-radiation model for waste water treatment for irrigation. He pointed out this technology reduces water related and water borne crop diseases and damage to national bio-diversity.
Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi told the House that the government is trying hard to make the recovery of electricity bills pending against the consumers. He also informed the members that about 30 small dams have so far been built in different provinces.
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