Minister assures PSM of government support

KARACHI: A minister has assured the management of Pakistan Steel Mills (PSM) of raising its funds paucity issue before the prime minister, official sources said on Tuesday.
The Minister of State for Parliamentary Affairs Sheikh Aftab Ahmed visited PSM ahead of a meeting of the Economic Coordination Committee (ECC) of the Cabinet. The meeting is expected to consider extension in bailout package to PSM to enable it to pay salaries and do major repair work, officials said.
“The minister assured the management that he would convey the issues (including shortage of funds) at PSM to Prime Minister Mian Muhammad Nawaz Sharif,” said a source.
“The ministry of industries and production has proposed imposition of 15 percent regulatory duty on import of hot rolled coils (HRCs), like it has done recently on other steel products to safeguard local steel manufacturers,” he said.
HRC is the leading product of PSM. However, it remained unable to sell it due to its significant import. “HRCs have piled up to 10-12 tons at the mills’ store,” a source said.
Another source said the government might also consider reviving the old system of steel imports under which importers used to take a no objection certificate from PSM and only those imported products, which are not made in Pakistan, will be allowed duty-free access.
PSM asked for another Rs13 billion for paying salaries, which have been due since November 2014, and for a major repair work of several steel plants.
Chief Executive Officer PSM Zaheer Ahmed Khan also visited Islamabad last week in his efforts to convince high officials for an extension in the bailout package.
The government has already disbursed a total of Rs18.5 billion to the mills from May 2014 to January 2015 for restructuring the mills ahead of its planned privatisation. The mills, however, failed to deliver the desired results from the package.
At present, the mill is meeting 40 to 45 percent of production capacity against the promised 77 percent (the breakeven level). Moreover, it was supposed to give salaries from its own earning from January-February 2015. Just before the grant of the bailout package, it was giving nominal one to two percent production of the total of 1.1 million tons/annum.
A PSM statement said the minister was apprised about necessary repair and maintenance work which was due because of liquidity crunch.