Cash strapped: Pakistan Steel Mills hands out eidhi instead of salary

Workers not paid for two months, given Rs10,000 as an Eid gift.


Our Correspondent October 15, 2013
PSM officials were expecting the government to disperse the remaining Rs1.5 billion in October 2013. PHOTO: FILE

KARACHI: The federal government has disbursed Rs10,000 to the employees of the Pakistan Steel Mills (PSM) on Eidul Azha, instead of their salaries for the months of August and September 2013, which irked the 16,000-strong workforce of the steel mill.

The payment is similar to the partial payments that the government had paid on the occasion of Eidul Fitr, when it transferred just Rs7,000 to the account of steel mills’ employees.

Due to financial constraints, PSM has not been able to pay salaries to its large work force. The steel mill has to give the salaries for the months of August and September 2013, but it is waiting for the next instalment of the bailout package that the federal government had promised to it.

PSM received Rs1.5 billion in the third week of September from government. The cash was the first half of around a Rs3 billion bailout package that the government approved for the state owned enterprise in September 2013.

The government had promised to disperse Rs700 million – part of the second instalment of Rs1.5 billion – on the occasion of Eidul Azha, but has so far failed in honouring its commitment, PSM officials said.

With that first instalment of Rs1.5 billion, the administration of PSM dispersed salaries of June and July 2013 to the employees. The two month salary had consumed Rs800 million, which is over half of the total amount, while rest of the money was used to pay for purchasing raw materials like iron-ore, coal and chemicals.

PSM officials were expecting the government to disperse the remaining Rs1.5 billion in October 2013, but were proven wrong on this occasion.

The cash-starved state run enterprise is facing severe raw material shortages that has badly affected it production capacity.

The fate of the enterprise is uncertain. The government is being pressurised to either revive the entity of privatise is along with other loss making state owned entities. So far the government has made no clear move, however the prime minister ordered the creation of a new board of directors for the company with individuals from the private sector, similar to what it did for the Pakistan International Airlines before ordering its privatisation.

Published in The Express Tribune, October 16th, 2013.

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COMMENTS (3)

unbelievable | 10 years ago | Reply

I'll bet the new Board of Directors got their paychecks.

whitesky | 10 years ago | Reply

The golden rule in Business is " grow with the Employer". If PSM is dying so will be it's employees. it is only a matter of time but inevitable is bound to come, sooner or later.

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