Minister ‘given’ exaggerated output figures by PSM
November 08, 2012: The management of Pakistan Steel Mills (PSM) has reportedly given exaggerated production figures to Production Minister Anwar Ali Cheema on Wednesday. According to an official privy to the proceedings of the meeting that was convened in Islamabad on Wednesday to analyse PSM’s Key Performance Indicators (KPI), the steel mill’s management informed the Minister that the mills production in October was 14 percent but insiders claimed that production in October was 6 percent whereas sale was Rs 780 million.
Production in May 2012 was 15 percent, in June 15 percent, July 21 percent, August 13 percent, September 7 percent and October 6 percent. Sale proceeds in May were Rs 810 million, followed by Rs 956 million in June, Rs 823 million in July, Rs 825 million in August, Rs 1.2 billion and Rs 780 million in October.
The meeting was convened in the wake of recently issued bail out package of Rs 14 billion, out of which Rs 3.8 billion was released as a first tranche. An official statement said that the CEO PSM Major General Muhammad Javed (Retd), apprised the meeting that the first tranche was received in late August, against which they placed order for purchasing raw material from abroad transported through two ships. He further said that, at least, two months are required to get shipment of the iron ore and coal from foreign supplier.
The situation is going from bad to worse given that losses have risen to Rs 78 billion and liabilities have mounted to Rs 8 billion. He further added that PSM management is also exploring the options of local suppliers of raw material from Sindh and Balochistan. In addition to that, he informed the committee that he is in contact with Governor State Bank to engage banks from Iran and Pakistan to facilitate the suppliers.
According to the management, PSM has almost 60,000 tons of raw materials available out of which 40,000 tons is ready for production and 20,000 needs refinement. It could enhance the production up to 25 percent by the end of the current month. Minister strictly directed the CEO PSM Major General Muhammad Javed (Retd), to ensure the recovery of loss as quickly as possible. We are trying to reach the desired level of 30-40 percent by the end of January 2013 and upto 70 percent by the end of 18 months of already approved bail-out package by the President. Insiders in the Ministry claimed that present CEO (ex-chairman from September 2006 to May 2008) was appointed with a view to improving the performance but no improvement had been seen in the performance of PSM in the period of 6 months: May to October.
Government also injected Rs 14.6 billion as bail out package and Rs 2 billion grant for employees on the proposal of present CEO. It is alleged that the grant was given for Peoples Workers Union to win the referendum. CBA tenure expired on June 23, 2012 but NIRC extended its period for one year up to June 2013. When this grant was received immediately CBA charter of demand was signed and approved.