Wednesday March 22, 2023

Steel Mills ‘operations’ to be privatised

By Agencies
June 05, 2020

By News Desk

ISLAMABAD: The Pakistan Tehrik-e-Insaf (PTI) government had decided to privatise the “operations” of the Pakistan Steel Mills (PSM) as it had become a “white elephant” putting huge burden on the national exchequer, said Minister for Industries and Production Hammad Azhar on Thursday.

Around 15 parties had shown interest in taking over the operational work of the defunct mill, said the minister at a press briefing here alongside with PSM Chairman Amir Mumtaz and Managing Director Sher Alam. He, however, clarified that only the operations of the mill would be privatised, while thousands of acres of the much-sought-after land would still remain in the custody of the PSM corporation. “The PSM employees were not working for the last many years and now they will get a financial package of around Rs2.3 million per employee as compensation,” the minister said. “Besides, they could also contribute to productivity in private sector.”

The minister said the PSM turned from a profit-making institution to one that incurred losses in 2008-2009 — during the tenure of the Pakistan Peoples Party (PPP) government — and its operations were shut down during the subsequent Pakistan Muslim League-Nawaz (PML-N regime.

Azhar said at one stage, the PSM had 30,000 employees out of which many employees had been retired and now there were around 9,000 employees in the mill. He added that the PSM had been closed for the last five years and previous governments could not devise any plan for it. The minister said the government had to spend Rs55 billion to pay the salaries to employees of a closed mill. He added that when the PTI came into power, the PSM was facing a loss of Rs176 billion and its interest obligations were also increasing day-by-day.

Azhar said the previous governments “could not handle this issue”, therefore, the incumbent government had to make the final decision about the mill’s fate “in the larger interest of the country”.

The minister said with that decision, the government would save Rs700 million of hard-earned taxes of Pakistani people per month. He said even the Supreme Court questioned why the government was paying workers of a closed mill. The presser comes a day after the Economic Coordination Committee (ECC) gave the go-ahead to a “full and final” human resource rationalisation plan for the PSM’s employees in accordance with the judgments and observations of the Supreme Court, resulting in axing of over 9,300 employees.