The Pakistan Steel Mill (PSM) is likely to receive the first instalment of the Rs18.5 billion from the Economic Coordination Committee by May 15, after which the salaries for February and March will most likely be paid.
The PSM spokesperson, Shazim Akhtar, made the announcement a few days ago, hoping that the bailout package will increase the production and performance of the steel mill.
The inhabitants of the ‘iron city’ are, however, no stronger to bear the impact of the ongoing financial crisis of the Pakistan Steel Mills (PSM) as the symptoms of the ‘economic genocide’ are clearly visible in the lives of the employees who once enjoyed everything in the secure embrace of Pakistan Steel.
Over 16,000 employees of the crises-hit-state-owned enterprise have different stories to share but the agonising plight they are going through is almost the same. Shopkeepers have refused to give groceries on credit; schools have barred doors for defaulters; utility bills debt is constantly increasing and people living in Steel Town and Gulshan-e-Hadeed are having a hard time meeting medical expenses.
“Due to the financial crisis, I’m unable to cook my children’s favourite meals,” regretted a housewife, Zahida Parveen. “Going out for dinner has come to an end. In fact, we avoid attending any event because it’s wise not to do so with empty pockets.”
While remembering the good times, Parveen said that her family has made a compromise with the situation but there were several others who couldn’t and in some cases didn’t. “I know a few women who left their homes following frequent quarrels with their husbands over monetary issues.”
Another aspect of the financial crunch is an increase in the number of crimes in the area, said a resident of Gulshan-e-Hadeed, Muhammad Imran Sarwar. “In two separate incidents, robbers looted six shops in broad day light.” Several snatching incidents have also been reported, he added.
“Hunger feeds crime but at the moment the situation is under control,” said ASI Farooq of the Steel Town police station. Farooq said that the suspects involved in robberies couldn’t be arrested so far and there has been no link between the financial crisis of the PSM and the crime rate in the area.
“Sending a customer back makes me feel bad but we are compelled to do so,” said a shopkeeper, “The business can’t run on debt for a long time.” A few other shopkeepers were of the view that the prosperity of the area was linked with Pakistan Steel and things would only get better if the employees were given salaries on time.
Is privatisation an option?
For decades, Steel Town and Gulshan-e-Hadded have been, by all accounts, considered Pakistan Steel’s iron city but in case of privatisation of the PSM, the former’s residents will be asked to evacuate.
“Privatisation is definitely not the future of Pakistan Steel and its employees. It can be revived through a one-go bailout package of Rs28 billion,” said the chairperson of the Collective Bargaining Agent (CBA), Shamshad Qureshi.
The CBA chairperson claimed that neither subsidy nor ‘a single actual bailout package’ has ever been given to PSM, adding that all the bailout packages were given in the shape of commercial loans that had to be returned with a mark-up.
Quoting the audit and finance department, Qureshi said there were over Rs110 billion liabilities on Pakistan Steel till December 31, 2013. There are over Rs210 billion monthly expenses but the production was just two per cent.
The board of directors had unanimously presented a ‘workable revival plan’ to the ministry of finance, which was rejected on January 16 this year, said Qureshi. Meanwhile, PSM spokesperson Akhtar denied that the plan was rejected by the finance ministry.
Published in The Express Tribune, May 14th, 2014.