Dar blocks extension of Pakistan Steel Mills CEO

Services not required as PSM has been closed for months: finance minister

Our Correspondent April 07, 2016
PSM remains shut since June last year and the outgoing CEO has failed to get the gas supply restored. PHOTO: FILE


Finance Minister Ishaq Dar on Thursday blocked the move to give an extension to Pakistan Steel Mills Chief Executive Officer, Major General retired Zaheer Ahmad Khan, whose two-year contract expired this week.

The outgoing CEO tried to meet Dar but could not get an appointment.

The services of the CEO were not required, as the PSM was almost closed for last many months, said Finance and Privatisation Minister Ishaq Dar while talking to The Express Tribune. He said that an acting CEO could look after the day-to-day affairs of the PSM.

PSM CEO could continue despite expiration of contract

The PSM is on the active privatisation list and its administrative affairs rest with the Privatisation Commission (under the Privatisation Ordinance).

The newly appointed Secretary Ministry of Industry, Khizar Hayat Gondal, had proposed to give either a six-month extension or let the General work until the unit is privatised after Khan met him on Wednesday, according to Ministry of Industry officials.

The PSM, which is the country’s largest industrial unit, remains shut since June last year and the outgoing CEO has failed to get the gas supplies restored. The Sui Sothern Gas Company Limited suspended gas supplies due to outstanding dues going over Rs20 billion.

It had promised to restore gas provided the PSM pays its current dues. However, the CEO could not arrange the requisite funds, said officials who were involved in these negotiations.

The Secretary Industry wrote on the file that it would not be appropriate to change the CEO in the middle of the privatisation process.

However, the Minister for Industry and Production, Ghulam Murtaza Jatoi did not support the extension. Jatoi had concerns over the performance of the outgoing CEO who obtained Rs18.5 billion bailout package but could not turnaround the ailing entity.

General retired Khan had also met with Secretary Privatisation, Ahmad Nawaz Sukhera to push his case for the extension.

In a letter to the outgoing CEO, the Privatisation Commission had also raised questions over procuring raw material of billions of rupees at a time when there was no such operational requirement.

In April 2014, the government had hired the services of Major General retired Zaheer Ahmad Khan at an annual special pay package of roughly Rs19 million that includes perks and privileges. His monthly salary was Rs1 million, excluding about Rs600,000 in allowances.

Prime Minister Nawaz Sharif had approved the special pay package, said an official of the Ministry of Industry.

Khan had been criticised for not playing a proactive role in taking the unit out of its financial crisis despite availing Rs18.5-billion bailout package.

Pakistan Steel Mills shows why state sell-offs are stalled

The government is now considering giving acting charge to one of the senior officers of the PSM. Names of Wasif Mehmood, Principal Executive Officer, and Arif Sheikh, the Chief Finance Officer, are under consideration. Sheikh is a relatively junior officer and is also serving on contract. He had been hired in July 2011 as General Manager Finance. Before that, he was working in the private sector.

The government offered the entity to the Sindh government in October last year. Since then, both governments are exchanging letters.


Published in The Express Tribune, April 8th,  2016.

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