PM gave his approval to a plan to inject Rs11 billion in PSM through different subsidies, and to waive a further Rs5 billion owed as interest on loans payable to NBP. PHOTO: FILE
Interim Prime Minister Mir Hazaar Khan Khoso has agreed in-principle to a Rs16 billion bailout package for Pakistan Steel Mills (PSM), to help the perpetually ailing entity regain a measure of profitability.
Sources said the prime minister gave his approval to a plan to inject Rs11 billion in PSM through different subsidies, and to waive a further Rs5 billion owed as interest on loans payable to the National Bank of Pakistan.
Sources said the plan was presented by Shahzada Ahsan Ashraf Sheikh, federal minister for industries and production, when he called on the premier on Tuesday.
According to a statement issued here, the minister had proposed a subsidy of Rs11 billion, which he said would go towards upgrading technology, making sick units operational and enhancing PSM’s production capacity. He also proposed that Rs5 billion owed as interest on loans payable to the National Bank be waived in order to keep PSM financially stable.
The elaborate “One-go Rescue Plan” for the revitalisation of PSM envisions setting it up as a profitable organisation, he said. The finance ministry will present its own recommendations regarding the proposal on Thursday.
While talking to journalists after the meeting, Sheikh said the organisation is operating in loss and needs bold and courageous decisions, such as the “One-go Rescue Plan”, which he claimed will prove to be a panacea to all of PSM’s ills. He revealed that he had ordered a strict ban on new recruitments in the company, as it cannot bear the financial burden of any more employees.
The minister was of the view that “half-hearted efforts” and injecting “insignificant amounts” had delayed the revival of the important public sector entity. “A whole-hearted effort is required to accomplish this gigantic task, for which I have suggested an elaborate plan that will be implemented under the supervision of a high-level committee,” he added.
The committee will include the finance secretary, the production secretary and the PSM chairman as its members, and will submit a development report every month.
The minister further claimed the plan will ensure that PSM achieves at least 70% production capacity utilisation by August this year.
Published in The Express Tribune, May 1st, 2013.
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