ISLAMABAD: The stakeholders of the defunct Pakistan Steel Mills have asked the federal government to order an in-depth 10-year performance audit for the mills’ deterioration leading to its closure and retrieve more than 2,000 acres of its precious land lost to land-grabbers.
Comprising employees, pensioners, suppliers, dealers and contractors, the PSM Stakeholders Group (PSMSG) has also put up a claim of Rs70 billion overdue payments and has demanded appointment of a professionally qualified management team to revive the closed industrial unit.
In a letter to caretaker Prime Minister retired Justice Nasirul Mulk, the PSMSG has offered to turn around the company by reviving its existing plant and expand its capacity three times to three million tonnes to stop its further bleeding, reduce foreign exchange loss and help support the domestic industry and the economy.
The group’s convener Mumrez Khan, in the letter, alleged that government’s ill-considered privatisation policies from 2005 to 2018 and appointment of non-professional men of choice whose performance was never monitored had paralysed the national asset. This was despite the fact that independent foreign financial advisers had concluded two years ago that an investment of Rs29bn could revive the PSM to profitability.
Employees, pensioners, suppliers, dealers and contractors seek company’s 10-year performance audit
He said the group members — serving and retired employees, dealers, suppliers and contractors — were running form pillar to post for payment of more than Rs70bn dues, including unpaid salaries since April 2018 to more than 12,000 serving employees.
It said the final dues of about 3,500 employees who retired between 2013 and 2018 had not been paid and about 610 pensioners out of them had already expired and their families waiting for retirement dues.
Mr Khan alleged that both the federal and provincial governments were acting like silent spectators instead of retrieving more than 2,000 acres of land grabbed by real estate mafia.
The group said a performance audit of the democratically elected parliament and successive governments since 1988 should be conducted because the PSM had turned from a profitable entity to loss-making unit and its ultimate closure in controversial circumstances three years ago.
It said the government could have saved the PSM from losses and liabilities and avoided burden of foreign exchange on imported steel worth $10bn due to low production had it heeded to fervent calls of the stakeholders. Instead the losses of the PSM have gone beyond Rs225bn (Rs106bn during 2008-13 and Rs119bn during 2013-18) while payable debts and liabilities have crossed Rs230bn as of June 30, 2018.
On top of that, the present situation at the mills is horrendous as it remains closed since June 2015 due to low gas pressure when its capacity utilisation increased to 65pc from 11pc and mark-up on loans was growing at a rate of almost Rs1bn per month and almost an equivalent expenditure on salaries, utilities, transport, etc, charges.
Moreover, the country is losing about $500 million per month on steel imports in the absence of local production, which has further created a monopoly of importer mafia and has upset the balance of payments.
It said the Pak-China Investment Bank had reported in 2015 that with an initial investment of $289m (about Rs29bn), uninterrupted power supply and a new management, the PSM with its ideal location, market and facilities had the potential of becoming a profitable enterprise.
Not only this, the country’s largest industrial complex could generate and put together funds required for expanding its production capacity to three million tonnes, the bank said and proposed a development and expansion plan with a capital investment of $288.77m in the first phase, $300.4m in the second and $296.62m in the third phase (total $885.8m — approximately Rs100bn).
The financial advisers had concluded, on the basis of field surveys, extensive data and in-depth discussions, that the PSM was steel enterprise which had a high starting point, complete process chain and the advantages of resource acquisition and regional market.
The advisers were of the view that being near the largest city with over 20m population and close to the 50,000-tonne bulk cargo wharf relying on raw material and fuels import, the PSM owned rare logistic cost advantages. With the expansion of production capacity in future, its harbour can also be used to ship products to the rest of the market, the advisers argued but in vain.