Sources said that the Steel Mills owed SSGC Rs13 billion for the gas the utility company supplied to it on credit. PHOTO: FILE
Sui Southern Gas Company (SSGC) has again warned of cutting gas supply to the cash-strapped Pakistan Steel Mills by May 31 if outstanding dues are not cleared. In this regard, the utility company has served a final notice to the steel producer.
Sources said that the Steel Mills owed SSGC Rs13 billion for the gas the utility company supplied to it on credit.
Previously, SSGC had served a notice to Pakistan Steel Mills to stop gas supply by May 27. On Tuesday, it then served a final notice.
“Now, we have given a final warning to Pakistan Steel Mills to stop supplying gas by May 31, if the outstanding amount is not cleared,” a senior official of the SSGC said.
He went on to say further that Karachi Electric Supply Company also owed SSGC a whopping Rs40 billion.
“The liquidity position of the company has reached a point where it cannot afford to continue supplying gas on credit to the Steel Mills,” the official said, adding that the a payment plan was also being negotiated with KESC to clear the backlog.
Despite injection of huge sums of money into Pakistan Steel Mills, it had failed to improve performance and is still accumulating losses.
Earlier, Caretaker Prime Minister Mir Hazar Khan Khoso had also agreed in principle to provide a Rs16 billion bailout package to the Steel Mills to revitalise the company. Khoso also agreed to give a Rs11 billion subsidy package and waive Rs5 billion interest on the loan the company had to repay to National Bank of Pakistan.
The subsidy and loan waiver was proposed by Caretaker Minister for Industries and Production Shahzada Ahsan Ashraf Sheikh to upgrade the mill, revitalise its sick units, ensure financial stability and enhance production capacity.
“A whole-hearted effort was required to accomplish the gigantic task of reviving Pakistan Steel Mills. The company may start turning out profit if it achieves 70% production capacity,” the official said.
Published in The Express Tribune, May 22nd, 2013.
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PSM needs a rude shock not another bailout from the tax payer money!! If they cant deliver let more capable person/s run the show