ISLAMABAD: The Senate’s standing committee on industries and production was informed on Monday that a decision on the privatisation of Pakistan Steel Mills (PSM) needed to be made soon.

A meeting of the committee, presided over by Senator Hidayatullah Khan, was told by the PSM management that pension of retired employees and widows of former employees was not being paid because of bad financial health of the mills.

Senator Mian Ateeq Shaikh proposed that the committee write a letter to Prime Minister Nawaz Sharif and request him to personally look into the matter and prevent the situation from deteriorating.

Privatisation Commission Chair­man Mohammad Zubair informed the meeting that the Sindh government’s offer to acquire the PSM had been forwarded to the finance ministry.

He said the government had extended a bailout package of Rs18.5 billion in 2013 to enable the mills to procure raw material and pay utility bills and salaries.

He agreed with the committee members that the PSM was in a serious financial trouble and said that it would be better to decide the future of the PSM as soon as possible.

He said there were two options; either the Sindh government acquire the steel mills or it should be privatised.

The meeting observed that the PSM management’s act of selling Rs3.3bn inventory was in violation of the instructions issued by committee and the Ministry of Industries and Production.

Industries Secretary Arif Azim said that a special audit of the inventory amount had been ordered to asses if the funds had been properly used.

“The ministry will ensure that the amount received from the sale of PSM products is utilised only after prior approval of federal government,” he said.

He proposed that the case of misuse of provident fund and gratuity of employees should be sent to the Federal Investigation Agency.

The secretary was interrupted by Mr Zubair who said that the gratuity and provident funds had not been used over the past three years.

The committee was told that the liquidity crisis erupted when the PSM faced a deficit of Rs20bn in 2008-09 because of losses of Rs26bn.

In May 2009, the PSM sought a bailout package of Rs20bn but it was not provided until 2013 and even then the package amount (Rs18bn) was released in instalments, the meeting was informed. As a result, the PSM could not be revived.

Published in Dawn, March 8th, 2016