Steel mills told to lay off daily wage-earners

ECC directs PSM management to send staff on leave to cut expenses

ISLAMABAD: In a politically explosive move, the Economic Coordination Committee has directed Pakistan Steel Mills authorities to lay off hundreds of daily wage earners and encourage regular employees to go on leave.

While approving the payment of two-month salaries to mill workers on Friday, the ECC asked the PSM management that over 1,200 daily wage earners should be sent home, senior government officials told The Express Tribune.





The ECC directions have come at a time when the country’s largest industrial unit stares at the possibility of imminent closure while running at just 1% of its capacity due to disconnection of natural gas supply by the Sui Southern Gas Company.

Over 15,000 employees work at the steel mill besides the daily wage earners. The PSM management has also been asked to submit a list of those contractual employees and consultants whose contracts have been renewed.

The management was also directed not to pay the shift allowance and hazard allowance as the factory was almost closed. The ECC also wants regular employees to be encouraged to avail their leaves in a move aimed at reducing the leave-encashment bill.

The government is already struggling to deal with the employees of another ailing state-run entity -- the Pakistan International Airlines. The airline staff has gone on strike against the decision to privatise the national flag carrier. And the decision to show the door to PSM daily wage earners may further complicate matters for the federal government.



Officials said that ECC Chairman Finance Minister Ishaq Dar and Minister of State for Information Technology Anusha Rahman strongly advocated cutting down the PSM monthly salary bill by sending people home.

The ECC also formed a committee to scrutinise the  monthly salary bill after complaints that the mill management was adding components like petroleum and conveyance allowances into the bill.

The PSM average monthly salary bill comes to about Rs480 million. The PML-N government has so far injected over Rs23 billion into the ailing unit. The entity is on the active list of privatisation and the federal government is in negotiations with the Sindh government for a government-to-government deal.

Other decisions

The ECC also allowed setting up small-sized liquefied natural gas-fired (LNG) power plants having an accumulative capacity of 1000MW in the private sector. The step is aimed at filling a gap that has emerged against the government’s planning to end power outages by December 2017.



The panel deferred a decision on waiving off the condition of international competitive bidding for awarding the contract of multimillion-dollar Eastbay Expressway project as part of the China-Pakistan Economic Corridor to Beijing’s nominated contractors due to legal objections.



The 18.9-km expressway is among the schemes to be completed under a framework agreement signed between China and Pakistan last year. Finance ministry officials say the Chinese government has recommended names of three companies for the award of the contract to any one of them.

Published in The Express Tribune, January 30^th,  2016.