KARACHI: Pakistan Steel has revised its production target for November to 50 per cent from 60pc set by the government.

“With the blast furnace (BF) no 1 in operation, the mills can only achieve production capacity of 45pc in the current month. Production target could have been achieved, had the blast furnace-2 been operational as well. We cannot put load on the blast furnace one to achieve the target,” said an official of the mill.

The official said the target could not be achieved due to multiple reasons since April 2014. The mills received Rs4.2bn under bailout package in May end instead of April, causing delay in placing orders for raw material import.

By June end, raw material arrived but the mills could not run due to severe water crisis in 15 to 20 days of July. In August, blast furnace one stopped working and again it became non-operational from Oct 9 to Nov 6.

The board of directors of the mills will meet on Nov 21. However, the agenda of the meeting was still unknown.

The government had approved a bailout package of Rs18.5bn for revival of the mills on April 27. To-date Rs13.5bn have been released from May to September. The employees have been waiting for their salaries since September.

Sources said that the release of Rs1.5bn from the government, which was expected this week, has been delayed. After getting Rs 1.5bn, the mills may be able to clear one month salary amounting to Rs480 million while the rest would be spent on clearing utility bills and procurement of raw material.

The production attainment was 7pc in July, 11pc in August, 21pc in September and 2pc in October in terms of capacity utilisation.

The new management appears to have failed to achieve the targets in accordance with the assurances made by its CEO to the government.

PSM is an integrated steel works, and performance reporting and evaluation on the basis of one unit, namely Steel Making Department (SMD) is not correct.

Sources said it is necessary to take into account the attainment figures for various parameters for all units, including figures for coke oven battery plant, thermal power plant, sintering plant, iron- making department, bloom caster, billet caster, slab caster , hot strip mill, cold rolling mill, galvanising plant, refractory complex, etc. The manpower deployment on all plants, the material consumption and energy efficiency figures all need to be fairly reported and taken into account.

Sources said the present management appears to have failed to secure the desired and committed targets for the mills as many members of the board do not have any experience of working in steel mill.

Sources said that the mills operating losses are Rs2bn per month for not reaching the break-even point of 77pc of capacity utilisation of 1.1m tonnes per annum. The losses and payable debt liabilities have, so far, crossed Rs250bn.

Published in Dawn, November 21th, 2014