Pakistan Steel Mills (PSM) has reportedly swallowed Rs 91.3 billion of federal government resources in 16 years (from 1999 to 2015) of which Rs 44.274 billion was non budgetary support and Rs 47.053 billion budgetary support due to corruption and mismanagement despite appointment of retired generals to head it.
PSM, which is now a “dead” entity, has been offered to Sindh government which will consider the offer of the federal government once all relevant documents are provided for evaluation. The provincial government remains undecided so far as to whether it would acquire PSM as a going concern on “as is where is basis”.
Finance Ministry headed by Senator Ishaq Dar, in its comments on a proposal of National Assembly’s Standing on Industries and Production (MoI&P) titled “pension /provident funds should be released to retired employee of PSM on priority basis” said that PSM is a commercial entity run by its own Board of Directors (BoD) with full autonomy in terms of commercial decisions. Such State-Owned Entities (SOEs) are not a charge on the budget of the federal government.
According to official documents, Finance Ministry further stated that the estimated monthly salary bill of PSM is Rs 480 million. Payment of salaries and gratuity to its employees is the sole responsibility of PSM and Finance Ministry is not obligated to discharge such payments. However, in view of serious liquidity constraints of PSM, Finance Ministry has been providing cash support to PSM for the purpose of payment of salaries on humanitarian grounds. Further, cash support if so required, will also be provided as an interim arrangement. Finance Ministry has made it clear that it is not in a position to extend cash support for an indefinite period.
“The entity is presently on active list of privatisation. PSM should endeavour to internally generate financial resources for its obligatory payments unless the entity is privatised,” said the documents. Finance Ministry has released an amount of Rs 24.242 billion to PSM from April, 2014 to September, 2015 which includes 17 month salaries.
Informed sources in federal government told this scribe that both the Privatisation Commission and Ministry of Industries and Production (MoI&P) are unhappy with the performance of incumbent management of PSM. This was evident during a recent meeting of the standing committee where it was witnessed that both Chairman PC and the top brass of the MoI&P were not in consonance with the views expressed by CEO PSM.
Source: Business Recorder