PM cautioned over delay in deciding fate of Steel Mills

Stakeholders group says PM is being misled by advisers about future roadmap of the giant industrial complex

By Ajmal Khan

ISLAMABAD: Stakeholders of the defunct Pakistan Steel Mills have alerted Prime Minister Imran Khan over deliberate delays by vested interests in revival or sale of the country’s largest industrial complex which has been bleeding for more than a decade.

Comprising employees, pensioners, suppliers, dealers and contractors, the PSM Stakeholders’ Group (PSMSG) said it was surprising to note that even on completion of one-year tenure of the new government, the Pakistan Steel Mills was without a management structure or board of directors and the federal ministries remained uncertain how to address the PSM challenge.

The convener of the group, Mumrez Khan, told Dawn that the prime minister was being misled by his advisers regarding the future roadmap for the PSM that stood shut-down since June 2015. He said the prime minister was first told the PSM would be revived through the Sarmaya Pakistan Company, followed by its proposed improvement through public-private partnership and then again by putting the industrial complex into the active privatisation list.

He said the PSM had been closed down by the PML-N government by reducing the gas supplies to it and the PTI government also appeared to be no different to the PML-N as it was also keeping the huge industrial complex closed.

He said the PSMSG offered the government to help turn around the company by reviving its existing plant and expand its capacity three times to three million tonnes to stop its further bleeding, reduce foreign exchange loss and to help support the domestic industry and the economy but its proposals were not entertained.

In a letter to the Privatisation Commission, the PSMC Stakeholders Group said its members were the unheard victims of the ministry of industries and production as more than Rs80 billion dues of its members and Rs190bn of other creditors were struck up at the PSM, under the ministry as of July 2019, making the total liabilities at Rs270bn against Rs217bn reported by the ministry to the prime minister early this month.

The letter said the ministry of industries proposed to the Privatisation Commission to go for public private partnership without endorsement of the PSM board of directors (BoD) and settlement of payable debts liabilities of creditors who have already filed cases in courts of law both local and abroad. The move, the letter said, was ill-advised as the Privatisation Commission could only conduct privatistaion and did not have the mandate for public-private partnership.

The group said the PSM board was non-functional and without chairman since March 28 this year while its management structure was non-existent. The post of permanent Chief Executive Officer (CEO) stood vacant since April 2016.

The PSM board requested the ministry of industries in September last year for appointment of permanent chief executive officer and chief financial officer, but the request remains unanswered.

The post of permanent chief financial officer (CFO) has been vacant since January 2013 and that was the major cause of financial indiscipline in the industrial complex.

The group said that the PSM’s 4-year accounts from July 2015 to June 2019 were not audited for reasons best known to the PSM and the ministry of industries. Therefore, there is also no authenticity of Rs217bn payable debts and liabilities quoted to the prime minister on August 5, 2019.

The PSM production came to an end in June 2015 due to reduction in gas pressure by the gas company on account of bills’ non-payment and the government failed to restore the process in a period of more than four years. There are a number of cases pending in courts (local & abroad) filed by creditors and PSM. The PSM Coke oven Battery Plant (COBP) and two of its batteries are on heating mode since 2010 without any production of coke and are consuming gas costing approximately Rs50 million per month while its employees are never paid salaries on time.

More than 5,000 employees got retired during 2013-19 and retirement dues of more than Rs17bn are also payable and that resulted in the Sindh High Court freezing accounts of the ministry of industries on August 20, 2019, till the payment of dues.