Labour groups demand Centre withdraw decision to dismiss Pakistan Steel Mills employees


Labour and rights groups on Sunday demanded that the federal government take back its decision to dismiss the employees of the Pakistan Steel Mills (PSM) and stop the privatisation of the steel mills and other public enterprises on the dictates of the International Monetary Funds,

In a statement, they said the workers of PSM had submitted their case against their dismissals in the Supreme Court of Pakistan and a hearing was fixed on June 9 in Islamabad.

The workers had started a protest campaign soon after the government’s annulment to retrench 9,350 employees of the PSM.

In continuation of the campaign, a protest rally will be held at the Karachi Press Club today and another rally will be held on the National Highways near the PSM at 10am on Tuesday, the statement said.

In the joint statement, they said the PSM was pushed towards a deficit in a planned manner. “The company had a profit of over Rs10 billion in 2007-08 while it had an inventory of about Rs 11 billion and Rs 12 billion in its account. But due to wrong planning, the company incurred a deficit of Rs26 billion within a year in 2009,” the statement said.

“This was largely due to the cancellation of international raw material procurement agreements in 2006, which caused irreparable damage to the mills by pretending to purchase locally,” the statement said. “However, a memorandum of understanding (MoU) was signed with the Russian government to get the company back on its feet. The Russian government has reportedly offered two billion USD to run the steel mills, but the reason for not taking it seriously is still unclear.”

The statement mentioned that in 2013-14, the then government gave a bailout package of Rs14.5 billion to continue the production process, which resulted in a gradual increase in production and at one point it reached 65% of the total production capacity. “But for unknown reasons, the blast furnace exploded in late 2014 which severely damaged the production process,” they said.

“Meanwhile, in June 2015, the Sui Southern Gas Corporation (SSGC) cut off the gas supply for non-payment of Rs17 billion of gas bills and put the production process to a complete standstill. The SSGC chairman at that time was Miftah Ismail who did not even issue a notice against a private company, K-Electric, which had to pay Rs58 billion to the corporation in respect of gas bills. It is a matter of the fact that the mill’s management inked an agreement with the gas corporation that the mill would pay monthly current bills while arrears would be paid in instalments but the supply of gas was abruptly stopped,” they maintained.

“It is also a frightening fact that under a 1985 agreement, the power plant of the Steel Mills was supplying electricity to the K-Electric at Rs2 per unit which goes up to only two rupees and 50 paise per unit till the closure of the mills in 2015,” they said.

They also demanded the formation of a high-level commission to identify the elements that could lead to “the demise of a major institution like PSM”, provide one-time funding for rehabilitation of the steel mills with a well-planned road map, and ensure timely payment of dues and pensions. They also asked the Sindh government to raise its voice against the privatisation of the steel mills at the Council of Common Interest as the PSM land belonged to the Sindh government.

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