• Blames PPP, PML-N for deterioration of Pakistan Steel Mills • Bilawal vows to rehire retrenched workers
ISLAMABAD: Amid strong reaction from Pakistan Peoples Party (PPP) over the Centre’s decision to sack employees of Pakistan Steel Mills (PSM), Minister for Industries and Production Hammad Azhar on Saturday said the organisation had been a victim of corruption and mismanagement, and therefore tough decisions were needed to curtail losses incurred by public-sector units.
“The accumulated losses of state-owned enterprises were more than Rs2,000 billion, which was even higher than our defence budget,” Mr Azhar said, adding that the money saved could be used for development purposes.
Addressing a press conference, the minister presented the restructuring plan of the Steel Mills, announcing that the PSM would be run through private sector to cut down losses the government had been facing to keep it afloat.
He blamed the PPP and PML-N for turning the mills into a loss-making entity, saying they would now play politics on the issue.
“The government had to take this decision in the national interest, which was why it was involving the private sector and cutting down staff,” the minister said.
The future course of action includes hiring of a financial adviser, through transparent bidding, and the Privatisation Commission proceeding to bring the PSM under private sector management, he added.
Initially, Mr Azhar said, around 4,500 employees out of 9,500 would be laid off with each employee receiving an amount ranging from Rs2 million to Rs3 million. The total dues to be paid has been estimated at around Rs10 billion, the minister said, adding that managing businesses was not the government’s job.
The steel mills would be looked after by the private sector with proper technology, management and adequate manpower, Mr Azhar said, adding that out of 19,000 acres owned by the PSM, 13,000 would be leased out to meet the expense.
Responding to a query over the offer made by the Sindh government to operate the steel mills, the minister said the provincial government could take part in the bidding process to be held at the Privatisation Commission.
He said though the steel mills had been closed for the last over five years, the government was still paying salaries and pensions without any output.
“The PSM was a profitable organisation till 2008 but it took a nosedive soon after the PPP took charge,” the minister said, adding that “the operational capacity of PSM was reduced to 40 per cent during the PPP government, registering a loss of around Rs100bn.
He said the huge loss was incurred not only because of corruption but also due to a significant rise in the salary bill after thousands of employees were inducted.
The minister also blamed the PML-N government for bringing down the steel mills’ operational capacity from 40pc to 20pc, and further to 6pc before finally shutting it down in 2015.
“The government had to pay Rs35bn in salaries to the employees of the closed mill and Rs20bn in pensions, with the total bill amounting to Rs55 billion,” he added.
Besides, Mr Azhar said, the steel mills had Rs230bn debt liabilities which were causing a loss ranging between Rs15 and Rs20bn annually whereas Rs750 million was being paid to employees as salary. In addition, Rs92bn was spent on the PSM’s bailout packages.
On the other hand, PPP expressed its resentment at the government’s decision while the PML-N remained relatively quiet.
PPP Chairperson Bilawal Bhutto-Zardari termed the incumbent government heartless and called for sacking Prime Minister Imran Khan instead of the workers.
He announced that his party would rehire all 4,500 employees that were being laid off.
“The land of this historic industrial asset belongs to the people of Sindh; we will not let PTI get away with this economic murder,” he said.
PPP’s parliamentary leader in the Senate Sherry Rehman also slammed the government for terminating the services of 4,544 employees of the steel mills.
“The decision of sacking employees with immediate effect under the guise of reducing financial burden on Pakistan’s largest steel-making plant should be immediately taken back. We are going through a pandemic and taking away livelihoods is the last thing the government should be doing,” Ms Rehman said.
“Tabahi Sarkar has once again taken a U-turn from its promises. Instead of creating 10 million jobs they are taking away livelihoods at a time when food insecurity is the highest in Pakistan. We rank 88th out of the 107 countries in the 2020 Global Hunger Index,” she added.
Published in Dawn, November 29th, 2020