PM approves bailout package for PSM

ISLAMABAD: Prime Minister Syed Yusuf Raza Gilani on Friday approved a Rs25 billion bailout package for the Pakistan Steel Mills as proposed by the Ministry of Industries and Productions.

The meeting was held to review various options to resolve the Pakistan Steel Mills (PSM) crisis.

The Prime Minister said PSM will not close down as it is a national asset but it has to be managed both professionally and commercially.

He emphatically stated that neither politicization nor interference in PSM affairs will be allowed in order to protect this state enterprise.

The Pakistan Steel Mills, he said, be restructured and revived as a commercially viable entity in accordance with the Cabinet decision to restructure the major state enterprises.

The Prime Minister specifically directed the Ministry of Finance to monitor the bailout package and restructuring of Pakistan Steel Mills to ensure transparency and judicious utilization of resources.

According to sources, out of Rs 25 billion, Rs3 billion would be released in June while Rs7 billion in July. Rs8 billion will be used for purchase of crude oil and the remaining Rs7 billion will be used for other matters

Earlier Minister for Industries and Production Mir Hazar Khan Bijarani mentioned that the cost of orderly closure of Pakistan Steel Mills as an option would be much more than to be spent on its proper restructuring.

Minister for Labour and Manpower Syed Khurshid Shah opined that the option of allowing PSM to close down would render 17000 employees jobless thus creating an enormous social issue.

Chairman Board of Governors Fazalullah Qureshi apprised the meeting that during the last three years PSM was totally dependent on imported raw material since there was disruption in supply of local raw material due to the poor law and order situation. The global recession and fluctuation of prices at international level are beyond the control of Pakistan Steel Mills, which were mainly responsible for the losses incurred, he added.

CEO of Pakistan Steel Mills Malik Asrar Hussain briefed the meeting through a presentation highlighting the financial difficulties of PSM arising out of global recession.

He further explained that the supply chain of raw material has to be ensured for the next two months for the viability of the Mills. He also dilated upon various options vis-a-vis the future of Pakistan Steel Mills.

While elaborating the details of restructuring plan he assured that after the bailout and proposed restructuring the turnaround of PSM is expected by the third quarter of next year.