ISLAMABAD, Sept 30: The Public Accounts Committee on Thursday criticized the Pakistan Steel Mills management for several financial irregularities that have caused a loss of over Rs350 million to the national exchequer.

Discussing the audit report of the industries and production ministry and its attached departments for 2000-01, the committee expressed its displeasure over the decision of the mills management to invest in the Arabian Sea Country Club, sources told Dawn.

The sources said the committee's members reprimanded the management for launching the Rs5 million Arabian Sea Country Club project at a time when the organization was facing a financial crisis. They said there was no logic in leasing out 300 acres of prime land under the project.

The members were of the view that on one hand the management sacked several employees due to the financial crisis and on the other hand it took an 'illogical' decision of investing in the club.

The committee criticized the management for its failure to recover the agreed rent of the leased land, amounting to Rs1.095 million, whereas the club failed to give dividends to its shareholders.

The sources said the committee members expressed regrets over the Nawaz Sharif government not taking seriously an offer made by China to make a huge investment in the mills.

The committee was informed that the management arranged funds from the House Building Finance Corporation for setting up a housing scheme for the employees but later failed to recover the interest on the loan from them. The organization had to pay Rs318.164 million as interest to the HBFC, it was told.

PAC Chairman Malik Allahyar directed the ministry's secretary to hold an inquiry into the matter and fix responsibility against the officials involved, a handout said. He directed the secretary to assert his supervisory role to safeguard the interests of public sector organizations and bar their managements from taking such "illogical and imprudent decisions".

The members expressed their concern over the reported loss of Rs20 million to the organization due to purchase of defective material. The committee called for recovery of the amount from the suppliers. It called for blacklisting of the suppliers and ordered an inquiry into the matter.

Discussing the audit report on the Export Processing Zones, the members lamented the lethargic attitude of the management for not pursuing investigation into theft of cable worth Rs2 million from the Karachi zone. The committee ordered an inquiry into the incident.

According to the sources, the committee's members were of the view that there had been no contribution of multinational companies although the zones were set up 25 years ago. They said that only about 100 factories were running on over 300 acres in the zones.