Pakistan Steel Mills financial woes continue

KARACHI: As the financial health of Pakistan Steel Mills (PSM) continues to deteriorate, the grievances of its serving and retired employees have increased manifold — with no respite in sight any time soon.

a PSM official said the accumulated losses of the mill swelled to Rs166 billion and total liabilities to Rs173bn in 2015-16 from Rs26.50bn and Rs35bn, respectively, in 2008-09.

KARACHI: As the financial health of Pakistan Steel Mills (PSM) continues to deteriorate, the grievances of its serving and retired employees have increased manifold — with no respite in sight any time soon.

Talking to Dawn a PSM official said the accumulated losses of the mill swelled to Rs166 billion and total liabilities to Rs173bn in 2015-16 from Rs26.50bn and Rs35bn, respectively, in 2008-09.

At present, the total employee strength is 12,800 while the monthly salary bill comes to Rs380 million.

The staff of Pakistan Steel Mills — which falls under the federal government — has been deprived of the yearly pay hike for the last many years owing to the precarious financial condition of the mill.

Retired employees are struggling to get their gratuity and other legal dues while serving officers have been ignored by the federal government from the annual increase in salary.

“Some 500 workers and 300 officers have retired during 2016 but they are not hopeful

about getting their legal dues after long service,” the official added.

Pakistan Steel has not deposited Rs40bn in the provident and gratuity trust from 2008 onwards to April 30, 2016.

The Provident Fund amounts to Rs21bn while gratuity is over Rs18bn.

However, PSM handed over gratuity and other dues to 100 employees in November 2016 after they went to court.

These 100 employees got their dues from the payment when PSM leased out 158 acres of land to Port Qasim. Some 138 deceased employees got their gratuity after the federal government provided the amount.

As many as 1,797 employees — who are alive and retired till Dec 31, 2015 — are waiting for their retirement benefits amounting to Rs4bn.

The official said the mill staff only got 15 per cent pay increase in 2009-10. In 2010-11, the government raised 50pc salary, followed by 15pc in 2011-12, 20pc in 2012-13, 10pc in 2013-14 and10pc in 2014-15.

However, the mill officers failed to get over 100pc relief from 2010-11 onward.

No one at the top: The Pakistan Steel Mills does not have a permanent Chief Executive Officer (CEO). Chairman Export Processing Zone Authority (EPZA) Mumtaz Ali Shah holds the additional charge of PSM CEO.

Pakistan Steel also does not have a chairman for the Board of Directors for the last many years.

The BoD — which must be comprised of 12 members (six from private sector and six from public sector) — currently comprises of five members (four from the public sector and one from the private sector).

There are seven directorates — Production, Technical Services, Human Resource Development, Commercial, BMR&E, A&P and Finance.

Currently a senior general manager is looking after five directorates (Production/TS/HR/BMR&E/A&P) as Acting Principal Executive Officer while another General Manager looks after Finance and Commercial Directorate as Acting Chief Finance Officer.

The official said the mill has been closed since June 10, 2015 owing to low gas pressure. Back then, the mill was running at eight per cent production capacity. The mill had been paying Rs18-20bn on account of gas bill payment since 2008-2009 till June 2016 to SSGC and if late payment surcharges are included then the amount exceeds Rs40bn.

The PSM has been suffering Rs2bn per month loss.

The workers received salaries up to September 2016 and so far three months’ salary is due, the PSM official said.

PSM has 19,000 acres of land in which the plant area — having over 20 operational units — is situated on 4,500 acres. The PSM had recently leased out 158 acres of land worth Rs1.48 to Port Qasim.

A 10-member delegation of Mobarakeh Steel Company of Iran visited PSM from Dec 22 to 28 to evaluate the possibilities of acquiring the facility.

The Iranian team had arrived as Boa Steel Group of China is reported to have lost interest in PSM. However, the accounts of the mill have been audited till 2011-2012 owing to which it is difficult for auditors to evaluate the actual price of Pakistan Steel.