Pakistan Steel Mills seeks Rs900-crore financial package
11 Apr 2012
Pakistan Steel Mills (PSM) has once again demanded a Rs900-crore bailout package to keep the mills running and to overcome its financial problems.
In the last three years, PSM has accumulated losses to the tune of Rs4,940 crore, including Rs2,650 crore loss in 2008-09, Rs1,150 crore loss in 2009-10 and Rs1,140 crore loss during 2010-11.
In a bid to bail out the mills, the government had provided Rs1,000 crore in 2009 and Rs60 crore in 2010. Currently, PSM's monthly losses stand at Rs120 crore and it runs at less than 20 per cent of its capacity.
PSM is also demanding that the government hike the business plan from Rs1,100 crore to Rs1,500 crore, with the increasing losses. Last year, it presented a business plan calling for fresh injections of Rs1,100 crore, inclusive of governmental help to pick interest for three years of Rs512 crore against the issuance of shares.
The Pakistan Tribune quoted a source as saying that in the PSM currently faces the issue of overstaffing at the mills; and every political party was trying to appoint their own people. The source said due to political support some workers were not attending duty but were taking full salary and the management was helpless. The Pakistan Steel Mills had now tuned into a 'politically sensitive' entity, they add.
Sources say servicemen who retired from the army also find their way to the company.
Though the cabinet would hopefully approve the amount it would provide, it won't touch the overstaffing issue as all the political parties were stakeholders of PSM and they had their own people employed there, whom they would not want to disturb as it would hit their vote bank, sources said.
