The white elephant that is the PSM
The real reason for the PSM’s plight is its management’s incompetence, and this is what the government should be...
At no point did he consider the issue of the PSM clearing outstanding SSGC bills or the extremely poor performance of its management over the years.. PHOTO: AFP
The Pakistan Steel Mills (PSM) is seeking yet another bailout package from the federal government in a bid to resume operations at the closed plant. It wants an amount of Rs4.2 billion to open letters of credit and make four-month salary payments. Normally, the news of the steel mill looking for money would pass without the raise of an eyebrow, but it is necessary to delve deeper to examine this particular development. The PSM is crying foul over reduction in the pressure of the gas it is supplied by the Sui Southern Gas Company (SSGC) and insists that this is the reason it has been unable to resume work. However, what its management completely avoids to mention is that the SSGC is also looking to clear outstanding bills due on the part of the PSM. Recently, the Sindh chief minister ordered the SSGC to resume gas supply to the PSM, declaring that “any conspiracy towards the steel mill or its workforce would not be tolerated by the PPP”, his concern highlighting the fact that majority of the employees at the PSM are PPP affiliates. However, at no point did he consider the issue of the PSM clearing outstanding SSGC bills or the extremely poor performance of its management over the years.
Using phrases such as “losses, shutdown and collapse”, is a desperate attempt on the part of the PSM management to seek yet another bailout. The entity has great historical and financial significance for Pakistan and had its management done a better job maintaining its complex infrastructure and financial health, it would have even been relatively competitive. In contrast, what we find is the government allocating it Rs5 billion as provision for loans and advances in the 2014-15 budget, which had shot up to Rs13.8 billion by the end of the year. In 2015-16, the government has reserved a provision of Rs3.8 billion for the PSM. That this amount would go up too, remains a foregone conclusion. The real reason for the PSM’s plight is its management’s incompetence, and this is what the government should be looking at when considering the steel mill’s future.
Published in The Express Tribune, August 12th, 2015.
Using phrases such as “losses, shutdown and collapse”, is a desperate attempt on the part of the PSM management to seek yet another bailout. The entity has great historical and financial significance for Pakistan and had its management done a better job maintaining its complex infrastructure and financial health, it would have even been relatively competitive. In contrast, what we find is the government allocating it Rs5 billion as provision for loans and advances in the 2014-15 budget, which had shot up to Rs13.8 billion by the end of the year. In 2015-16, the government has reserved a provision of Rs3.8 billion for the PSM. That this amount would go up too, remains a foregone conclusion. The real reason for the PSM’s plight is its management’s incompetence, and this is what the government should be looking at when considering the steel mill’s future.
Published in The Express Tribune, August 12th, 2015.