Karachi – The heartless government’s sacked 4500 workers of Pakistan Steel Mills. PPP will return each and everyone back to work,” Bilawal tweeted. “We will not let the PTI get away with this economic murder,” he said and added: “Sack Imran, not workers.”
Minister for Industries Hammad Azhar responded to Bilawal’s tweet, saying: “Let me remind everyone that it was during PPP tenure that PSM went from a profit making entity with billions in bank account to a heavy loss making and bankrupt entity. Capacity was taken down to 40 per cent and then PML-N shut it down in 2015.”
The same day, workers of the PSM blocked the National Highway — a main highway that runs outside the steel mills — in protest, where they burned tyres, resulting in gridlocked traffic on the thoroughfare, according to Geo News.
On Friday, the PSM sacked 4,544 of employees, including the divisional and assistant managers. The management confirmed that officials belonging to category 2,3, and 4 pay groups were dismissed. A PSM spokesperson stated that dismissal letters have been sent to sacked employees by post.
In a press conference on Saturday, Azhar further elaborated on his tweet and rolled out a restructuring plan for the mills, which he said would be run through private sector management to make it a profit-earning organisation.
The minister said the government had to take “hard decisions” to check the losses inflicted on the national exchequer through state-owned entities. He added that state-owned entities were inflicting losses greater than the defence budget of the country.
Azhar said the PSM had been closed for last five-and-a-half years while the government had to pay billions of rupees worth of salaries and pensions to the employees “for nothing”.
The minister said the operational capacity of PSM was reduced to 40 per cent during the PPP government while in this tenure it registered losses of around Rs100 billion. He said the PPP, during its tenure, had inducted thousands of employees in the mills which was beyond its capacity.
Likewise, he added, during the PML-N government, the operational capacity was further reduced from 40 per cent to 20 per cent and then to 6 per cent and ultimately, it was closed down in 2015.
He said the political parties that were responsible for making the PSM a loss-making organisation were now playing politics on the issue, but the government had to decide according to the national interest.
He said the government had to pay Rs35 billion as salaries to employees of the closed mill and Rs20 billion in pensions to retired employees, bringing the total amount to Rs55 billion.
In addition, he said the PSM had Rs230 billion in liabilities and was inflicting losses of Rs15-20 billion annually, while Rs75 million were being paid to employees as salaries. In addition, Rs 92 billion were spent on bailout packages of the mill.
The minister said the government wanted to make it a profit-making entity by involving the private sector and reducing excess staff. He said the government would hire a financial adviser, through a transparent bidding process, with whose consultation the Privatization Commission would proceed forward to bring the PSM under private sector management.
Initially, he said, around 4,500 employees out of 9500 would be laid off in the first phase, followed by the next phase that would result in the laying off of 95 existing employees of the mill. Each employee would get an amount ranging from Rs2 million to Rs3 million. “The total dues to be paid have been estimated at around Rs10 billion which would be paid timely,” he added.
He was of the view that had the decision been taken at appropriate time, billions of rupees would have been saved that could have been utilised in development funding. He added that managing a business was not the government’s job, hence the PSM would be managed by the private sector with proper technology, proper management and adequate manpower.
The minister said with these measures, the private management would lift the PSM from loss-making organisation to profit-earning mill and get it to stand on its own feet. He said out of 19,000 acres of land owned by the PSM, 13,000 would be leased to bear the expenditures.