Minister of Factories and Development Hammad Azhar blamed the PPP on Saturday for converting Pakistan Steel Mills (PSM) from a profit-making entity with billions in its] bank account to a heavy loss-making and bankrupt entity after Bilawal Bhutto-Zardari, the party’s president, lashed out in the PTI government for sacking more than 4,500 PSM workers.
According to news, more than 4,500 Pakistan Steel Mills workers were fired on Friday after an emergency meeting chaired by the organization’s Chief Executive Officer.
The management of the organisation reported to The Press that officials belonging to grade 2,3 and 4 pay categories had been removed from their positions and that the dismissal letters had been sent via mail to all those affected.
The federal government had already authorised the retraction of all the remaining 9,350 PSM workers with a one-time severance cost of approximately Rs20 billion in June.
Reacting to Friday’s reported developments, Bilawal called the Center’s action “heartless” and vowed that his party would “return each and everyone back to work”
The property of this historic industrial asset belongs to the people of Sindh, we’re not going to let the PTI get away with this economic assassination, he tweeted. “Sack Imran is not a worker,” he said.
The heartless government’s sacked 4500 workers of Pakistan Steel mills. PPP will return each & everyone back to work. The land of this historical industrial asset belongs to the people of Sindh, we will not let the PTI get away with this economic murder. Sack Imran not workers.
— BilawalBhuttoZardari (@BBhuttoZardari) November 28, 2020
Responding to Bilawal’s message, Azhar said he wanted to remind everybody that it was during the PPP [government] era that the PSM went from a profit-making company with billions in its] bank account to a strong loss-making and bankrupt entity.”
Power was limited to 40% and then the PML-N shut it down in 2015,” said the Minister.
Addressing a press conference later that day, Azhar announced the firing of the workers, stating that the PSM was a tale of “corruption, mismanagement, overstaffing and recruitment” adding that “tough decisions” would have to be made to fix the problem.
PSM was a profit-making company in 2008 and had almost Rs8 billion in its bank accounts and debts, but this profit-making organisation had suffered a great deal in the PPP’s tenure, and its potential was also limited. More than Rs100bn of damages have been suffered.
The mill accumulated annual losses of Rs 15-20 billion, he said.
He revealed that last month, the PTI government had paid Rs 24bn pension fees to PSM workers who had been withheld since 2013.
In this case, our government has agreed to involve a private investor and to fire workers who have been recruited either at the wrong time or on the wrong expertise to address the issue of over-staffing, he added.
He said that the government would pay Rs3m to each of the 4,500 workers who had been dismissed, in compliance with the legislation and the PSM Services Act.
I know a lot of politics is going to be conducted on this matter by people under whose time, controversies have arisen and the PSM] has been lost, and it has been locked. So we need to realise that we’re going to pay Rs20-30m to each of these 9,500 individuals, but if we don’t take that call, we’re going to have to put billions of ropes more in this mill.
The Minister claimed that if the government had invested the money on infrastructure programmes, such as constructing schools and hospitals, instead of placing it in the PSM, millions of people would have gotten jobs.
He said that the losses of state-owned companies approached Rs2,000 billion, which is more than the country’s entire defence budget. “If we want to take the economy forward, we will have to take these decisions. I believe this was the right decision on which implementation has started.”
The PSM has 19,000 acres of land, of which 1,200-1,300 acres will be rented to operate the operation of the mill. This would be achieved in the most straightforward way, according to the laws on privatisation, he added.
He added that attempts will be made to engage a foreign player in the development of the mill in collaboration with the government. Management authority must have been turned over to the private group, he added.
Privatisation of PSM
In June, the Cabinet Economic Coordination Committee (ECC) initiated a ‘full and final’ human resource rationalisation programme for PSM workers in compliance with the judgments and findings of the Supreme Court of Pakistan and other courts hearing cases affecting the PSM.
Under the decision, the government will cut the workforce by 100 pc, which was 9.350 at the time. Out of the total, only 250 workers will be kept for a duration of 120 days to carry out the strategy and all required work. The other workers will be told of loss of employment. The financial effect of the scheme worked out at Rs 19,657 billion was to be issued in a single tranche for the payment of gratuity and the provisioning of funds.
In addition, PSM workers will earn one month’s pay from the authorised supplemental payment on the basis of wages. The estimated payment per employee will then be Rs2.3 million.
Last week the Prime Minister’s Advisor on Structural Reforms, Dr Ishrat Husain, announced the division of the Steel Mills Land into two pieces, as well as a scheme to lay off its current workers by giving them wages for two to three years.
The PSM has been non-functional since 2015, but wages and other packages are being paid by the government,” he added, adding: we would set up a privately-owned Steel Mills corporation and 1,200 acres of its land will remain under the administrative control of PSM. Steel Mills’ operational capacity is estimated to rise by up to three million tonnes per year compared to one millimetre a year.
He said that 19,000 acres of other PSM property will remain under government regulation.