ISLAMABAD: Prime Minister Yousaf Raza Gilani on Friday approved Rs 25.1 billion bailout package for Pakistan Steel Mills, saying that the PSM will not close down as it is a national asset which has to be managed both professionally and commercially.
The premier linked the bailout package to improved performance and said that politicisation of or interference in the affairs of the PSM will not be allowed.
The proposal for the bailout package was given by the Ministry of Industries and Productions at a special meeting held at the Prime Minister’s House. The meeting reviewed various options available to the government to resolve the PSM crisis.
According to reports, Rs7.8 billion will be released soon to purchase raw material for the PSM. A sum of Rs3.3 billion will be released this month for immediate needs and expenditures and Rs6.6 billion will be released next month for selective requirements.
Top managers of the once profitable enterprise, however, said it would take them at least two more years to bring about a change by overcoming losses to the tune of Rs1 billion a month now.
A participant of the meeting told The Express Tribune that the PSM has expressed its inability to even pay salaries to its employees and sought Rs3 billion for this purpose immediately.
The official said the PSM management has set the deadline of the third quarter of next fiscal year (2010-11) to reach at a financial break-even and start earning profit in case state money is pumped into it through the package.
Prime Minister Gilani said the Pakistan Steel Mills had to be restructured and revived as a commercially viable entity in accordance with the cabinet’s decision to restructure major state enterprises.
He specifically directed the Ministry of Finance to monitor the bailout package and restructuring of the Pakistan Steel Mills to ensure transparency and fair utilisation of resources.
Earlier in the meeting, the Minister for Industries and Production Mir Hazar Khan Bijarani had mentioned that the cost of an ‘orderly closure’ of the Pakistan Steel Mills would outstrip any amount spent on its proper restructuring.
Published in the Express Tribune, June 12th, 2010.
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