PSM cuts jobs to reduce salary expenses
Monthly pay bill comes down to Rs380m from Rs435m
The salary bill for PSM employees, which was Rs435 million per month in November 2015, was reduced to Rs380 million in March 2016. PHOTO: REUTERS
ISLAMABAD:
The government has reduced the salary expenditure of Pakistan Steel Mills (PSM) by dismissing employees in a bid to ease the burden on the national exchequer.
The disclosure was made in a meeting of the Economic Coordination Committee (ECC) held on March 2.
Ailing PSM seeks Rs75m to foot staffers’ power bills
According to a senior government official, the Privatisation Division told the ECC during the meeting that a committee comprising representatives of the Privatisation Division, Finance Division and PSM was constituted on January 29 last year to examine and verify the salary bill of the steel mill.
“After a series of meetings between all stakeholders, it was decided that PSM will reduce its salary bill to Rs380 million per month from March 2016 after rationalising the workforce working on contract and daily wage,” it said.
Accordingly, the salary bill for the mill’s employees, which was Rs435 million in November 2015, was slashed to Rs380 million in March 2016.
In November 2016, the steel mill had 281 daily-wage employees and 191 contract staff.
The Privatisation Division said PSM operations had been at a standstill for the past around one and a half year and employees had not been paid for three months since November 2016. It requested the ECC to give approval for the release of salary for November, which was approved.
While the government has given bailout packages worth Rs56.45 billion, the mill is still suffering huge losses. Its accumulated losses amount to Rs177.78 billion and liabilities stand at Rs138 billion.
It has to pay Rs14 billion in interest to the National Bank of Pakistan out of total loans of Rs36.3 billion.
Additional pressure
It has been discovered that 12,500 employees of PSM as well as the top management were still receiving free electricity.
Steel mill owes govt Rs39.4b
Moreover, the mill owes Rs19 billion to Sui Southern Gas Company (SSGC). Previously, SSGC had reduced gas pressure to the bare minimum, which caused suspension of production activities at the mill in mid-2015.
At that time, the mill was operating at average 33% efficiency. Since then, it has not been able to resume operators with losses swelling continuously.
Published in The Express Tribune, March 14th, 2017.
The government has reduced the salary expenditure of Pakistan Steel Mills (PSM) by dismissing employees in a bid to ease the burden on the national exchequer.
The disclosure was made in a meeting of the Economic Coordination Committee (ECC) held on March 2.
Ailing PSM seeks Rs75m to foot staffers’ power bills
According to a senior government official, the Privatisation Division told the ECC during the meeting that a committee comprising representatives of the Privatisation Division, Finance Division and PSM was constituted on January 29 last year to examine and verify the salary bill of the steel mill.
“After a series of meetings between all stakeholders, it was decided that PSM will reduce its salary bill to Rs380 million per month from March 2016 after rationalising the workforce working on contract and daily wage,” it said.
Accordingly, the salary bill for the mill’s employees, which was Rs435 million in November 2015, was slashed to Rs380 million in March 2016.
In November 2016, the steel mill had 281 daily-wage employees and 191 contract staff.
The Privatisation Division said PSM operations had been at a standstill for the past around one and a half year and employees had not been paid for three months since November 2016. It requested the ECC to give approval for the release of salary for November, which was approved.
While the government has given bailout packages worth Rs56.45 billion, the mill is still suffering huge losses. Its accumulated losses amount to Rs177.78 billion and liabilities stand at Rs138 billion.
It has to pay Rs14 billion in interest to the National Bank of Pakistan out of total loans of Rs36.3 billion.
Additional pressure
It has been discovered that 12,500 employees of PSM as well as the top management were still receiving free electricity.
Steel mill owes govt Rs39.4b
Moreover, the mill owes Rs19 billion to Sui Southern Gas Company (SSGC). Previously, SSGC had reduced gas pressure to the bare minimum, which caused suspension of production activities at the mill in mid-2015.
At that time, the mill was operating at average 33% efficiency. Since then, it has not been able to resume operators with losses swelling continuously.
Published in The Express Tribune, March 14th, 2017.