Government indifference to PSM woes causes concerns

December 20, 2013


Pakistan Steel Mills (PSM)
Pakistan Steel Mills (PSM)

Ministry of Industries and Production (MoI&P) is reportedly very concerned over the indifference of Finance Minister Senator Ishaq Dar to the continued serious financial woes of Pakistan Steel Mills (PSM), sources close to Secretary Industries told Business Recorder.

PSM has inflicted a Rs 15 billion loss to the national exchequer (Rs 3 million per hour) during the last seven months because of inefficiencies, shortages of raw material and plant”s operation at extremely low capacity. PSM”s summary was on the agenda of the last two consecutive meetings of the Economic Co-ordination Committee (ECC) of the Cabinet, but the committee”s Chairman who is the Finance Minister did not deal with the matter ostensibly due to paucity of time, the sources added.

“We invited Board members to Islamabad to plead the case of PSM before the ECC but the Finance Minister ignored this very important issue. PSM which is unable to pay salaries to its employees gave air tickets to Board members in addition to other facilities so that they could plead the case effectively,” the sources added.

Secretary MoI&P, in a summary signed on December 10, 2013, had already got approval of the ECC to invite PSM”s Board members. Secretary Industries and Production, Shafqat Naghmi, who is the appointed Chairman of PSM”s Board of Directors in violation of SECP rules, also discussed different options with regard to PSM with Board members. However, inextricably, he did not take BoD into confidence on the final document submitted to the ECC that did not come under discussion, the sources maintained.

An insider in PSM from Karachi told Business Recorder that PSM”s Executive Committee of Management (ECM) is also furious at acting CEO, Wasif Mehmood for not sharing details of pre-privatisation plan submitted to the ECC. The ECM has discussed the ways and means to lay off surplus manpower which at present totals 16,000 which translates into 275 employees per Metric Ton(MT) as opposed to regional benchmark of 67 employees per MT.

Out of 4,882 officers, 2446 ”officers” are intermediate, metric or middle-pass. Average cost of staff is Rs 58,566 while average cost is officers is Rs 80,943. Mehmood, however, shifted the responsibility of “keeping information secret” onto the shoulders of Secretary Industries.

Currently, PSM is operating at 1.38 per cent capacity (almost closed) but the engineers and workers are still claiming shift allowance and hazard allowance and no one is monitoring this practice. The condition of blast furnaces is very poor and it is unclear that they will start operation in case the government extends some kind of financial package to revive the mills.

National Accountability Bureau (NAB) had started investigating PSM a couple of years ago on the directives of Supreme Court of Pakistan but nothing was seen on the ground. The names of some accused who are still the kingpins in PSM have been removed from the initial suspect list.

The previous PSM Board was also responsible for failing to touch on key issues like corruption, inefficiencies, over employment. The present Board headed by the Secretary Industries and Production is also said to be following in the footsteps of the previous Board led by Fazal Ullah Qureshi.

Courtesy Business Recorder

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