PSM turned into loss making institution during PPP tenure: Hammad Azhar

Steel mill employees will get financial package of around Rs2.3 million each, says industries minister

ISLAMABAD: Federal Minister for Industries and Production Hammad Azhar said on Thursday that the government decided to privatise the Pakistan Steels Mills (PSM) as it had become a "white elephant" and was a huge burden on the national exchequer.

"[PSM] employees were not working for the last many years and now they will get financial package of around Rs2.3 million per employee as compensation," he said while addressing a press conference flanked by PSM Chairman Amir Mumtaz and Managing Director Sher Alam in Islamabad.

On Wednesday, the PTI-led federal government had decided  to terminate all employees of the PSM, taking a giant but politically difficult step to stop years long hemorrhaging instead of reviving the country’s largest industrial unit.

The Economic Coordination Committee (ECC) of the Cabinet also approved to give the due monetary benefits along with one month salary that will cost the exchequer Rs18 billion to Rs19.7 billion.

Hammad said the PSM stopped making profits and turned into a loss making institution during the tenure of Pakistan Peoples Party (PPP) government in 2008. "Its operational works were shut down during the Pakistan Muslim League-Nawaz government [in 2013]."



He said the PSM was closed for the last five years and the previous governments could not devise any plan for its revival. "At one time the mill had 30,000 employees out of which many were retired and now it has only 9,000 workers."

The minister said when they came into power the PSM was facing a loss of Rs176 billion and its interest payments were also piling up with the each passing day.

The government had to spend Rs55 billion to pay the salaries of employees, he said, adding that the decision of privitisation was taken in the larger interest of the country.

Hammad maintained that the privitisation of PSM would save Rs700 million of tax payers's money per month and added that around 15 parties had shown interest in taking over the operational work of PSM.

He clarified that only operations of the PSM would be privatised while thousands of acres of land would still remain in custody of the PSM corporation.