SHC seeks details of PSM sell-off from PTI govt

Counsel claims PTI govt did not make any effort to run the steel mills

KARACHI: The Sindh High Court on Monday issued notices to the federal government, the Ministry of Industries and Production and the attorney general on a plea, challenging the privatisation of the Pakistan Steel Mills (PSM) as well as termination of thousands of employees and sought details of the case being heard in the Supreme Court.

A two-member bench, comprising Justice Omar Sial and Justice Zulfiqar Ali Sangi, heard the plea.

The petitioner’s counsel apprised the court that the employees were not responsible for the condition of the PSM in any way because the institution suffered the loss due to wrong policies of the former governments.

He claimed that the Pakistan Tehreek-e-Insaf government also didn’t make any effort to run the steel mills.

He also claimed that the Centre wanted to privatise the PSM and its decision to “terminate thousands of employees is wrong”.

The counsel moved the court to declare the federal government’s action illegal and restrict it from terminating the employees.

The court sought details about the privatisation of PSM and a case pertaining to it being heard in the SC from the federal government and directed the attorney general for Pakistan to submit the reply, given by the government, in the court by June 23.

On June 6, the Ministry of Industries and Production had submitted a report to the SC, stating that the federal government had so far disbursed Rs58 billion to the PSM through five bailout packages since 2008-09 to ensure survival of the country’s largest industrial unit.

The report was submitted days after the Economic Coordination Committee (ECC) of the Cabinet decided to terminate all employees of the PSM – which is not functioning since 2015.

The ministry compiled the report to respond to a query of Chief Justice of Pakistan Gulzar Ahmed who while heading a three-judge bench on March 12 wondered why the PSM had employed thousands of people and how it was giving salaries to them when the steel mills was not operating for years.

The bench had also asked the federal government to attend to all PSM affairs immediately.

According to the report, the PSM owes Rs22 billion to the Sui Southern Gas Company – a state owned gas supply company – as principal amount. The National Bank of Pakistan (NBP) – a state owned bank – also extended a loan of Rs36.42 billion to the PSM and the loan is yet to be paid.

The report said that the PSM stopped commercial function in 2015 without formulating any human resource plan of its 14,753 employees. The number of PSM employees declined to 8,884 in 2019 wherein 2,233 are officers and 6,651 are workers.

The government of Pakistan pays Rs355 million for monthly net salaries of the PSM employees and it doesn’t include the component of leave encashment, provident fund and gratuity.

So far the government has released Rs34.01 billion as net salaries to the PSM employees. The government has also made a payment of Rs1. 266 billion to deceased employees on compassionate grounds to mitigate suffering of families.

It said the government constituted Expert Group in 2018 with an object to invite professional recommendations for the revival of PSM.

The group primarily recommended that the government should establish a public-private partnership to raise the necessary capital investment and obtain technical expertise for revival of the PSM.

The report revealed that a financial adviser has been appointed and working in collaboration with the Privatisation Commission. (With input from news desk)