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
ISLAMABAD:
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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COMMENTS (5)
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If Pakistan Steel Mills appoints me (I am an Indian Metallurgist) as its Technical Chief and gives me full authority and gives me support in non-technical areas, I can pull it out of its present troubles. I have done it earlier a few times in my career.
Pakistan could build a lot of hospitals and schools with Rs16 billion, or conversely buy a lot of steel, or have I missed something?
it is not the PM who release the money it is the presidency; The big house has personal stakes in the Steel mills - how come he can see losing this. This is very common using people money and investing in own business in Pakistan.
This is what our tax money is used for!? These companies need to be privitized! This is why you further increased the oil prices? Well has to be since the dollar rate has been steady for some time now.
Unfortunately, as with other state-run organizations, Pakistan Steel has been used heavily for recruitments on political grounds. My advice to the govt. is to sell this monster to private sector.