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ECC approves Rs2.9 billion bailout package for PSM


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The Economic Coordination Committee of the Cabinet Saturday, with Federal Minister for Finance Ishaq Dar in the chair, discussed a proposal for an interim relief for the Pakistan Steel Mills. – File Photo
The Economic Coordination Committee of the Cabinet Saturday, with Federal Minister for Finance Ishaq Dar in the chair, discussed a proposal for an interim relief for the Pakistan Steel Mills. – File Photo

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet Saturday approved a three-month bailout package of Rs2.9 billion for the Pakistan Steel Mills (PSM).

Rs1.5 billion will be released in September while Rs700 million each in October and November. This will include two-month salary of the workers.

The ECC, which met here with Federal Minister for Finance Ishaq Dar in the chair, discussed a proposal for an interim relief for the Pakistan Steel Mills and decided that the Chairman Board of Investment and the Ministry of Industries should come up with a proposal for long term solution of the problem in the next meeting.

The ECC also decided that the PSM would remain a public sector enterprise, by seeking a strategic partner with a minority stake to run its management.

The Governor State Bank of Pakistan informed the meeting that the SBP had received the first installment of US$550 million from the International Monitoring Fund, increasing the foreign exchange reserve to US$10.4 billion.

While reviewing the key economic indicators, reasons behind the inflation increase were analyzed by the ECC.

Expressing satisfaction over the sugar stocks of 2.229 million tons, the ECC directed the Trading Corporation of Pakistan (TCP) to purchase 100,000 MT to maintain its strategic reserves.

Similarly, the committee was told that presently the wheat stock was 7.043 tons compared to 6.750 tons in the corresponding period last year.

The government body expressed satisfaction that there were 85 days of oil reserves in the country, compared to 29 days in the corresponding period last year. This improvement, it noted, had come about as a result of clearance of circular debt by the government.

The meeting was informed that export in the month of July has increased by 9 per cent to US$2.62 billion.

Need for a comprehensive strategy to bring in quantum growth in exports of the country was also discussed as the exports during the last few years have been hovering around $25 billion annually.

The Finance Minister said that value addition, focus on non-conventional items and identifying of new markets were necessary for increase in the export.

It was decided to constitute a committee with Federal Minister Ahsan Iqbal as its chairman in that regard. The committee was tasked to submit its recommendations within a month.

The meeting expressed satisfaction over the increase in collection of revenues by the FBR by over 20 per cent in July-August 2013 as compared to the corresponding period last year.

The committee hoped that FBR would redouble its efforts to achieve the target of Rs2475 billion.

The meeting was informed that large scale manufacturing had shown an increase of 4.2 per cent. However, it expressed dissatisfaction over the negative growth in sectors like engineering products, automobiles, wood products, electronic and fertilizers.

Moreover, the Ministry of Industries was directed to examine the decrease of growth in those sectors and come up with concrete recommendations to improve them.

Comments (9) Closed

Sadruddin Mitha Sep 08, 2013 12:01pm

For how long people of Pakistan will have to milk these white elephants and for what reason -------------?stop this nonsense for good do not bleed us any more than we can take it.

pakiboy Sep 08, 2013 12:08pm

lol .. bailout package for any friend of PM and finance minister .. so he can also make some assets somewhere ..

mohammad imran khan Sep 08, 2013 03:40pm

The only solution of PSM is privatization.

mohammad imran khan Sep 08, 2013 03:43pm

The only solution of PSM is privatization .

Chisti Sep 08, 2013 05:14pm

GOP should privatize PSM. I don't understand why every gov hesitate to privatize PSM. Talk with some PSM employee, he will tells u a long list of corruption stories inside PSM. I m sure that PSM will become Pakistan's biggest asset in two years if GOP decides to privatize it now. M humble request to FM is plz privatize this PSM. For GOD's sake plz.

kirther Sep 08, 2013 11:16pm

Want to make positive change then the government should stop appointing people on quota basis, the only criteria for appointment should be merit based on educational and professional accomplishments. Non professionals appointed through government channels are trouble makers.

Mumrez Khan Sep 08, 2013 11:44pm

Pakistan Steel Mills, is a highly politicized public sector organization and is a victim of adhocism, poor governance, ill planning and corruption at the hands of persons of choice appointed by the government to head this organization not knowing the metallurgical industry by the successive governments from 2006 till date. Blaming the PSM for failure is unjustified. It depends on the knowledge, experience and attitude of the man behind the machine. PSM was a success story in the years July 2000 to September 2006. No injection of unplanned funds can improve the performance with out appointing an accountable and knowledgeable Board of Directors and executive Management who know the subject of metallurgical complex. Crusade against corruption by initiating the process of accountability - Save PSM in the interest of country for development of the country. Privatization of PSM means monopoly of private sector which will negatively effect the development budget of the country and will be cost to the public. Government may learn the lesson from the past privatization and results and take positive decision by appointing right man for right job to run these organizations.

YOUSUF HUSSAIN Sep 09, 2013 12:57pm

Privatization is not the solution ,in seventies this steel mills was in profit what happen,why this steel mills goes in loss,there was planing started during Zia rule and all department were getting under the influence of one man and no one can ask the question,all corruption were started during his rule,before that we were no aware of the world corruption and every department getting in loss during his period.If you will privatirize that PSM that will show your incompatency you should improve the present structure of the mill by adding good and integent people,if you will privatize ,you will not get the peoples from sky,these people will do the job. The problem is that after every 8 to 10 Pakistan face major problems initiated by exteral and interal forces which badly damage our infra structure, like in 1977,then 1988 and then 2007 in which Railway get 20 billion loss in one day,bank, air lines there was not a single department which was not effected by that incident.Actually we must consider we are behind all these activity,just to destablise Pakistan.

Taha Lateef Sep 10, 2013 07:07pm

The PSM was still in profit even under Musharraf. But the problem is that once the government decideds to put its own chronies as CEO's having little or no accountability and starts employing people just for the sake of it, enterprises like PSM are bound to start making loses nad lots of it. Privatization will atleast bring in competant people, on merit and try to reduce the loses and not come to the government everytime for a bail out from our tax money which can then be used for something productive.

Let PSM be in the private sector. How many really big manufacturing enterprises are there in the private sector? Are they performing well? Let there be one more.