Pakistan Steel to seek Rs11bn bailout

KARACHI: Pakistan Steel CEO Saadat Cheema will meet Finance Minister Ishaq Dar on Wednesday, and seek a bail-out package of Rs11 billion for the mills. He will also seek immediate release of Rs4bn for paying other utility expenses as well as salaries to employees which could not be paid for two-and-a half months. As Eidul Fitr falls in the second week of August, employees are awaiting release of their salaries as they were paid half month’s salary for May, while full salaries of June and July are yet to be paid by the mills. Monthly salary expenses of the mills are Rs500 million. The mills is currently running at 12 per cent capacity due to negligible quantity of coal and only 40,000-50,000 tonnes of iron ore. These raw material quantities would be enough to run the mills by August end by maintaining production capacity at 12pc. The employees of the mills have urged the Federal Industries and Production Minister to release salaries of the employees before Eid and resolve heavy financial crises besides releasing a significant bailout package immediately. If the issue of salaries is not resolved immediately, it will compel thousands of employees to agitate, according to a decision taken by the executive committee of Voice of Pakistan Steel Officers (Voice) in a meeting held at Gulshan-i-Hadeed under the chairmanship of Mirza Maqsood. The executive committee of Voice asked the federal government to take notice of mills’ performance issues, besides releasing employees salaries, and funds for payment of utilities bills and procurement of imported raw material (ie Iron ore and coal). The committee lamented that no action had been taken so far against corruption. It also said that the new board of directors of PSM has not yet been constituted, a competent Chief Executive Officer of PSM has not been appointed on merit, and no visible action had been taken for revival of the mills. According to Voice’s press release, the only action taken is that just an advertisement has been published for induction of new Chief Executive Officer of PSM by the Ministry of Industries and Production which shows reluctance of the government in handling crucial matters of this vital organisation. They pointed out that only 20-30MW has been generated from thermal power plant of the mills instead of 165MW, while huge a financial crisis is being faced by the mills due to acute shortage of raw material which ultimately resulted in low capacity utilisation and stumpy production. The Voice alleged that the former CEO, Maj-Gen (Retd) Mohammad Javed, is merely responsible for non-restoration of raw material supply chain (iron ore and coal); secondly for non-payment of salaries of employees and thirdly for shutdown of electricity of the PS.