2015, PSM’s gas bill was Rs5.5442 billion while Rs2.2 billion were paid by the current management”.
“In spite of working capital deficit due to four months delay, Rs20-30 crore were paid every month and Rs40 crore in March 2015 with promise to pay current bill from April 2015. However dumping reduced our sale drastically making it impossible to service our bills in April, May and June 2015 though we appreciate ECC for RD on 1st March 2015, 14th March 2015 and finally got approved 12.5% RD on Steel leaving our baron mixed alloy steel on 19th March 2015 which did not help a bit to increase sales. RD on baron alloy steel now has been enforced in recent budget”.
“The record is all clear to see; no stoppage of gas, and rightly so was done during previous year in spite of meager payment of Rs8.6 million while in spite of working capital delay 50% payment amounting to Rs2.6 billion were made since April 2014 and still our gas pressure was reduced first in January 2015 for 10 days and then in March 2015 when 50% and 65% capacity respectively were achieved and again since 10th June 2015 and to the extent that no production is possible.” “Pakistan Steel is not normal mill, it is an integrated plant whose 20 or so units are inter-related; it is also the biggest industrial complex of Pakistan and an essential foundation of its industrial growth; we all need to help it now that government has provided Rs18.5 billion to kick-start from zero production. It is earnestly requested not to damage a national asset now that it has been revived. As agreed, we will pay current bill, InshaAllah from next month so please restore gas pressure immediately as any more K-electric tripping will damage plant beyond redemption. We have spent a night of terror on 7/8 July 2015 and with great difficulty saved the plant and next time it may not be possible.”
It is worth mentioning here that the Sui Southern Gas Company (SSGC) through a press release has denied Pakistan Steel Mills’ (PSM) allegations and clarified that as on July 8, PSM has an outstanding balance of over Rs34 billion with SSGC, which is growing every month due to continuous default by the mill. PSM has defaulted on its payment commitments repeatedly and has not presented any palatable payment plan for the settlement of large overdue balances. The last partial payment received from PSM was in March 2015, SSGC said.
Despite the fact that PSM has been persistently defaulting on its payments, SSGC has been accommodating PSM and even today supplying it with 10mmcfd gas in order to keep its operations going. However, if PSM continues to default on its payments, its action will have a major impact on the financial health of SSGC, forcing the derailment of its capital expenditure projects, which are of national interest. SSGC is accountable to its board of directors and has the right to take remedial measures to protect the interest of the company, it said.