Pakistan Steel Mills provided Rs58bn since 2008-2009 in bailout packages: SC told


ISLAMABAD: The government of Pakistan has been disbursing Rs58bn to the Pakistan Steel Mills since 2008-2009 in the form of five bailout packages, the Supreme Court of Pakistan was informed by the Centre on Tuesday. 

The federation, through the Ministry of Industries and Production, filed a report with the apex court on the PSM. The report said the PSM had stopped its commercial operations in June 2015 without formulating any human resource plan for its 14,753 employees.

It said the number of employees came down to 8,884 in 2019 of which 2,233 were officers and 6,651 were workers. The government pays Rs355 million for monthly net salary to the PSM employees excluding the component of leave encashment, provident fund and gratuity.

It further revealed that the government had so far released a total of Rs34.01 billion as net salary for the employees. Moreover, the federal government has also paid Rs1.266 billion to the families of deceased employees on compassionate grounds.

The court was further informed that the federal government had constituted an expert group in 2018 to invite professional recommendations for the revival of the PSM.

The group primarily recommended that the government should establish a public-private partnership to raise the necessary capital investment and obtain technical expertise for the successful revival and expansion of the mills.

It was also recommended that the government should appoint a technical advisory consortium to design an appropriate structure followed by leading a transparent international competitive bidding process to select a preferred bidder and implement the liability settlement plan.

The court was further informed that the PSM Board of Directors held a meeting on April 16, 2020, in which they approved a human resource retrenchment plan which was presented before the ECC of the Cabinet through the Ministry of Industries and Productions. The ECC directed that the proposal be submitted afresh after consultation with the PSM management. This decision was taken so that its scope could be extended to the maximum number of employees along with disbursement and payment plan.

The court was further informed that in line with the ECC decision, the PSM, with the approval of its board of directors, shared the revised plan suggesting 100% retrenchment of the workforce.

The ECC approved the plan moved by the Ministry of Industries and Production dated June 3 2020 with the direction that payment to the mills’ employees shall be contingent upon the Supreme Court decision.

“The payment calculated by the PSM shall be final once and for all and shall not accrue any further liability against the Government of Pakistan/PSM in this regard,” the report concluded.

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