Government is to pledge funds for PSM
Islamabad: The government on Thursday ordered the payment of a part of salaries to the staff of Pakistan Steel Mills but refrained from pledging any major financial support for its turnaround, considering it ‘too risky’.
A meeting of the Economic Coordination Committee of the cabinet presided over by Finance Minister Ishaq Dar discussed the Steel Mills’ affairs for almost an hour but could not find a way to revive the country’s largest industrial complex or keep it running in a ‘respectable’ way.
Therefore, it requested Privatisation Commission chairman Zubair Umar and ministry of industries to work together to prepare a proposal for the PSM’s sell-off because all the five options put forth by the secretary industries involved huge capital injection from the budget without any guarantee that it would yield any positive result.
It was noted that salaries had not been paid to the PSM employees since October 2013 and decided that 45 days of salaries would be paid to them forthwith.
In early August, Mr Dar had said that a solution to the PSM’s problems would be worked out within a week. However, he could not take time out of his busy schedule to consider the five options presented by the secretary industries for almost five months as the bleeding entity lost another Rs15 billion.
A brief presented reportedly by Shah Saad Hussain, a PSM director, showed that any financial commitment at this stage could be a risky option. In his view, a technical audit of the machinery and plants was in order to verify claims that the PSM could work at 82 per cent of its capacity.
The audit would not only determine the status of machinery but also suggest if the aged plants would be attractive to any potential investor.
The Alternative Energy Development Board was also authorised to approve any project-specific amendments in the Standardised Security Agreement provided it do not increase government’s financial and contingent liability beyond those stipulated in the original agreements.