KARACHI: The Ministry of Finance has released Rs960 million for the Pakistan Steel Mills (PSM), which will be used to disburse salaries for March and April to all the employees.
The amount was approved in the Economic Coordination Committee (ECC) meeting held under the chair of Finance Minister Senator Ishaq Dar on June 17.
A new operational plan to achieve 77% capacity utilisation of 1.1 million tons production by December and an average of 57% capacity utilisation in the next six months with bare-minimum fund requirement has also been forwarded for consideration to the ECC, said the PSM release.
The plant got some life after the government’s bailout of Rs18.5 billion in April 2014.
The PSM, in its release, stated that 27% capacity utilisation was achieved in six to eight months after a gap of four years, 50% was achieved on January 7, and 65% on March 10, 2015, after which reduction in gas pressure began.
The release also said that the suspension of gas since June 10, 2015 has already made steel making and rolling of slabs impossible, and now the only remaining production unit ie the blast furnace was also at a risk of severe damage and ultimate closure.
The Ministry of Petroleum and Natural Resources should ask Sui Southern Gas Company (SSGC) in the national interest to normalise gas pressure to PSM to save the plant machinery, the release added.
Closure will leave the Pakistani steel industry at the mercy of imports at a huge cost to the national exchequer in foreign exchange, it said.
Meanwhile, the PSM, looking to revive its lost status, is looking for a bailout package of Rs6 billion. It says the amount would be sufficient for appropriate capacity utilisation after which the privatisation process can actually get under way.
The government, looking to privatise the sick unit, has opted to restructure the PSM before handing it over to the hands of another owner.
Published in The Express Tribune, July 3rd, 2015.
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