The German textile company, KiK Textilien, has released an amount of $5.15 million for disbursement among affectees of the Baldia factory fire, confirmed the National Trade Union Federation (NTFU) General Secretary Nasir Mansoor on Wednesday.

Talking to dawn.com, Mansoor said the amount has been transferred to the account of the International Labour Organisation (ILO) in Geneva.

He added that consultations are going to start from Thursday to devise a mechanism for distribution of the amount among affected families.

"ILO Country Directer in Pakistan Ingrid Christensen will hold consultations with affected families on Thursday, with representatives of Non-Governmental Organisations (NGOs) in attendance."

The funds were transferred under an agreement between KiK and the Pakistan Institute of Labour Education and Research (Piler) and are to disbursed among the families of the victims.

The first installment of the compensation amount of one million dollars had already been distributed among affected families through a judicial commission set up by the Sindh High Court earlier.

Talking about the proposed mechanism of distribution, Mansoor said that the affected families went through a "bitter experiment" while dealing with local institutions for payment of the dues.

He further added the affected families prefer judicial institutions for distributions, instead of governmental organisations such as the EOBI.

The NTFU general secretary said the agreement was reached in September last year. KiK was the only known buyer of Ali Enterprises' products.

"Initially, the company had denied to pay any sort of compensation but later it agreed to pay an amount when the stake holders, with the help of NGOs, took up the matter in Germany through media campaigns," said Mansoor.

"The government of Germany also played their role in the agreement on the payment of amount to the affected families."

Furthermore, he said that there are still some disagreements between the affectees and the company over responsibility of the catastrophe.

The company has denied holding any responsibility of the incident, saying that owners of the factory were solely responsible for security precautions, he added.