KARACHI, Aug 30: Pakistan Steel Mills (PSM) has yet to receive Rs2 billion from the finance ministry despite the orders of Prime Minister Raja Pervez Ashraf during his visit to the mill on August 10.
The ministry was directed to release the amount for increase in salary of PSM workers before Eidul Fitr. The prime minister had also promised another Rs1 billion in case the mills production reaches 50 per cent.
The Pakistan Steel spokesman told Dawn on Thursday that no notification had so far been issued by the finance ministry in compliance with the PM directives.
The PSM workers and staffers have not been getting any salary raise since 2009 quite contrary to other government employees who get 15-20 per cent increase in every budget.
However, only PSM officers were getting an ad hoc amount since 2011.
The official said that salary issue for 17,000 staffers and workers had been resolved to some extent as the first installment from Rs3.8 billion bailout package had been released for the purchase of raw material and disbursement of July and August salaries.
Out of Rs3.8 billion, only Rs500-600 million will be left with the PSM after payment of July and August wage bill (Rs900 million) and over Rs2 billion to be spent on procurement of 110,000 tons of coal and iron ore.
While simply saying that the PSM had been running at 13-15 per cent production capacity due to acute raw material shortage, the official did not give actual figures of production recorded in July and August and even details regarding availability of iron ore and coal stocks.
The spokesman said the mill had opened two Letter of Credits for purchase of 0.11 million tons of coal after the clearance of National Bank on August 29. These LCs were opened on release of the first tranche of the bailout package announced by the government against the business plan of Pakistan Steel.
The National Bank has opened the LCs for the purchase of two shipments of coal from Australia and Canada containing 55,000 tons each.
Moreover efforts are being made to purchase iron ore and soon its shipments will be finalised after completion of necessary formalities, he said. However, the mill would not buy iron ore from Iran due to some problems. The spokesman said hopefully the coal shipments would reach PSM Jetty in two months.
He recalled that last arrival of raw material (coal) was made in January 2012. The mill management had planned to raise the production capacity to 50 per cent in first phase, 70 per cent in second phase and 80 per cent in third phase in case raw material continues to arrive persistently.
General Secretary of the Organisation of Pakistan Steel Officers Hidayat Ullah Ameri said five officer associations jointly sent a letter to the Pakistan Steel CEO on Thursday seeking facilities and incentives, revision of pay scales and annual increments.