Union demands probe into PSM losses in two years

ISLAMABAD: As the government released about Rs12 billion for part payment of retrenchment cost and salaries to employees of Pakistan Steel Mills (PSM), the Insaf Labour Union (ILU) has demanded that the president and the prime minister investigate an additional loss of over Rs50bn suffered by the country’s largest industrial unit over the past two years.

According to two separate directives, the finance ministry has ordered release of Rs11.013bn as loan for payment to PSM as first tranche for retrenchment of 4,544 employees approved by the Economic Coordination Committee (ECC) of the cabinet. Another amount of Rs647 million has been released as loan for payment of salaries for the months of November and December to the PSM employees, as ordered by the federal cabinet.

Both loans will be “recoverable in 20 years along with interest with a grace period of five years for recovery of principal amount. The interest will be chargeable at the prevailing rate for the respective year”.

On the other hand, the ILU (CBA) has written letters to the president and the prime minister, informing them that they had been misled by the authorities in the PSM and industries ministry about the situation at the mill leading to retrenchment of 4,544 employees and creating a law and order situation in Karachi.

Government releases Rs12bn for part payment of retrenchment cost, salaries to PSM employees

The CBA also demanded an investigation into the losses suffered by the PSM between 2006 and 2020 due to “ill-planned privatisation, spot purchases of raw materials, discriminatory steel import tariff and Coke Oven Battery Plant’s critical repair & preservation cost”.

The CBA demanded that the PSM management and the industries ministry be asked to explain any plausible justification for non-implementation of the Supreme Court’s March 2020 order for eight months in which the court had sought factors leading to the losses. According to the union, PSM suffered a loss of about Rs302bn between 2008 and 2020.

The ILU claimed that the present PSM management was also controversial as its chief executive officer (CEO) and other top officers had been appointed through a tailor-made advertisement which had been challenged in the Sindh High Court.

The union also raised questions over the credibility of some of the sitting cabinet members for creating hurdles in steel import tariff rationalisation, initiation of accountability process for financial recoveries and appointment of professional management at PSM.

The CBA argued that privatisation was not a solution to the problems being faced by PSM keeping in view its chronology of events which caused a loss of more than $12bn to the exchequer between 2005 and 2020.

The ILU reminded President Arif Alvi and Prime Minister Imran Khan that the revival of paralysed PSM was an “important priority” of the Pakistan Tehreek-i-Insaf (PTI) before it came to power as repeatedly promised by them as well as Planning and Development Minister Asad Umar. However, it regretted, they did not make appointment of a permanent CEO and chief financial officers and rejected proposals for PSM revival through local human resource and funding, including payment to retired employees.

“PSM losses further increased approximately to Rs50bn in the 29 months of the tenure of PTI,” the union said, adding that PSM’s accumulated losses stood at Rs212bn on June this year, compared to Rs188bn under ‘audited’ accounts FY2018-2019.

The CBA called for early resolution of the matter through tripartite negotiation between the PSMC Stakeholders Group (whose more than Rs65bn was stuck-up), ILU and the federal and Sindh governments to save time and money being wasted on delaying the revival of PSM, unnecessary litigation, maintaining law and order and application of safety measures in the wake of Covid-19 pandemic.

The CBA demanded that the retrenchment letters of 4,544 employees be withdrawn till the Supreme Court concludes the PSM case and till such time as the merits and demerits of the plan for revival of PSM through privatisation/public-private partnership are reviewed and compared with the plan proposed by the PSMC Stakeholders Group.