KARACHI: The Pakistan Steel Mills (PSM), the nation’s largest steel-producing entity with an annual production of over 1.1 million tonnes, has been completely shut since the past sixty months since 2015 with zero production.
The national asset is the largest steeling producing unit in the country being operated by the federal government. The steel and other allied industries are dependent on the PSM as they remould steel and can be considered as a market for the steel mills. PSM was developed with the assistance of the former Soviet Union as a frontline for the socialist state but has fallen into disorganisation and neglect ever since.
PSM was supposed to be developed in three stages. The first stage was completed in 1985 when production reached 1.1 million. The second and third phase was supposed to enhance production to 1.5 million tonnes and eventually three million tonnes but was never realized. This has come at a steep price for the local industry and the need to import steel and meet the drop in production.
The PSM is currently facing gross negligence, mismanagement, corruption and political interference. Due to the gross mismanagement, the salaries and wages of employees are delayed for months while gratuity funds, provident funds, benevolent trusts, EOBI payments, and pensions have been gobbled by the authorities. The entity is one of the largest employers in the country and the lives of thousands of employees and their families are at stake.
The healthcare facilities for employees have also been curtailed. The PSM Hospital earned revenue of Rs10 million monthly in 2008 from private patients but cannot provide diabetes tests for employees or handle emergency patients. The retired employees of 2015 are still awaiting their gratuity funds, while those who retired in 2015 have not been paid outstanding dues and retirement benefits. There are six thousand retired or deceased employees who have not been paid their dues.
There have been no increments in salaries since 2009 even though the government has increased salaries by 155 percent ever since. The gratuity funds are being deducted from employee’s salaries and all other allowances have been stopped. There has been no investigation and either the PSM’s Board of Directors or Ministry of Industries and Production is responsible for the downfall. The Auditor General of Pakistan (AGP) has not conducted an audit of PSM’s accounts.
The PML-N government started the restructuring of the PSM in 2014 and appointed Major General (retired) Zaheer Ahmed as CEO as part of the new policy. He approved a budget of Rs18.5 billion to expand production to 70 percent capacity and increase revenue by Rs9 billion annually. When his two-year contracted ended, PSM’s deficit had increased to Rs50 billion while outstanding dues stood at Rs45 billion.
The decline in production is being blamed on low gas pressure as the Sui Southern Gas Company (SSGC) suspended gas supplying over outstanding dues. A further 900 employees are expected to retire in 2020 but cannot receive pension funds or retirement benefits. Many have legal action over the non-payment of dues going way to 2013.
The PPP has opposed the privatisation of the PSM stating that it belongs to Sindh and is the legacy of former Prime Minister Z.A. Bhutto. The PTI became the only party to join PSM in protest while in opposition but has not provided any concrete strategy or policy to revive the national asset while it is now in power.