Staff Reporter
Islamabad
Federal Minister for Industries and Production Hammad Azhar Saturday rolled out restructuring plan for Pakistan Steel Mills (PSM), which would be run through private sector management to make it profit-earning organization. Addressing a press conference here, the minister said the government had to take hard decisions to check the losses inflicted on national exchequer through State-Owned Entities (SOE).
The minister said the State-Owned Entities were inflicting loss of around Rs200 billion to the national exchequer, which is more than the defence budget of the country. Azhar said that PSM had been closed for last five-and-half years while the government had to pay salaries and pensions of billions of rupees to the employees for nothing.
The minister said the operational capacity of PSM was reduced to 40 percent during the Pakistan Peoples Party (PPP) government while in this tenure it registered loss of around Rs100 billion. He said the PPP during its tenure had inducted thousands of employees in the mills which was beyond its capacity.
Likewise, he added, during the PML government the operational capacity was further reduced from 40 percent to 20 percent and then to 6 percent and ultimately, it was closed down in 2015. He said the political parties that were responsible to making the PSM a loss-making organization would now play politics on the issue, however, the government had to decide according to the national interest. He said the government had to pay Rs 35 billion as salaries to employees of the closed mill and Rs20 billion pensions to retired employees, bringing the total amount to Rs 55 billion.
In addition, he said that PSM had Rs 230 billion debt liabilities and was inflicting losses of Rs15-20 billion annually, while Rs 75o million were being paid to employees as salary. In addition, Rs 92 billion were spent on bailout packages of the mill.
The minister said the government wanted to make it profit earning organization by involving private sector and reducing over-staff.
He said the government would hire a financial advisor, through transparent bidding process, with whose consultation the Privatization Commission would proceed forward to bring the PSM under private sector management. Initially, he said, around 4500 employees out of 9500 would be laid off in first phase, followed by next phase that would result in laying off of 95 existing employees of the mill. Each employee would get an amount ranging from Rs 2 million to Rs 3 million. The total dues to be paid have been estimated at around Rs10 billion which would be paid timely.
He was of the view that had the decision been taken at appropriate time, billions of rupees would have been saved that could have been utilized in development funding.
