- Inevitable preliminary to privatization
The Economic Coordination Committee of the Cabinet has decided on the retrenchment of all 9350 employees of the Pakistan Steel Mills, and though the decision must be ratified by the full Cabinet, it should go through, including a one-time salary payment of Rs18 to 19.7 billion, which would give workers an average of Rs 2.3 million each. It might seem an odd decision while the government needs every penny it can get to pay for the coronavirus pandemic, but it should also be remembered that the PSM had not been operating since 2015, and since then, the salary bill, then for 14,753 workers, had been met by the government, and adjusted as a loan in PSM books. Since 2013, that loan has reached Rs 34 billion, with a monthly bill of Rs 350 million. The move was probably overdue, not least as a preliminary to privatization, as any new owners would be free to hire anyone they might feel useful without any preconditions. One problem would be that those still on the rolls would include many political appointees, for the PSM was long regarded as a source of jobs for the boys.
At the same time, there should not be much delay in the PSM privatization. It was done before, and the Supreme Court stepped in and cancelled the deal. PSM may own much desirable real estate, but that should not be an excuse for holding back on a necessary step. Also, while PSM workers have been given due compensation packages, their fate should not be used as an excuse to stop their retrenchment, and the government should resist the inevitable pressures to take back the step.
However, that does not mean the plan is flawless. There has been no appreciation shown of the consequences of turning loose nearly 10,000 workers onto the job market, at a time when the economy is in free fall. There should have been a rehabilitation plan, ideally voluntary, on offer. It is still not too late for the government to come up with one, preferably in partnership with the workers who will be affected. This should be done quickly, while employees have not yet spent the capital they have in the form of their compensation, so that it is available for use, if need be.