The Supreme Court (SC) on Thursday said that the mismanagement of Pakistan Steel Mills (PSM) was the reason behind its downfall and in this regard summoned summoned federal ministers Asad Umar, Hammad Azhar and Muhammad Mian Soomro in connection with PSM employees promotion case on February 9.
The apex court had initially summoned the ministers immediately, but after a recess had learned that the ministers were not in the city, and had therein directed them to appear before the court on February 9.
Chief Justice of Pakistan (CJP) Gulzar Ahmad, while heading the two-member bench constituted to hear the case, remarked that in practical terms the Steel Mills did not exist and the court will order for closure of the mills.
The chief justice said that the court will close down the mills if the management refuses to improve their performance.
Chief Justice Gulzar Ahmed said that mills that have been closed do not need a managing director or CEO. These offices are nothing but a burden on the national treasury, he said.
The CJP questioned the federal secretaries appointed by the government, who, he remarked, did not work and merely wrote letters like clerics.
“The closed mills does not need any MD or chief executive. The management and officers of the institution are a burden on the national exchequer. They should be removed from the mills before the employees,” the CJP said.
The counsel for PSM, Shahid Bajwa, apprised the court that the entire administration of the organisation has been replaced, adding that only 439 of the 1,800 employees remain.
To this, CJP Gulzar asked if the replacements would make the organisation functional, and asked what the retained 439 employees had been doing when the mills were closed.
The CJP remarked the steel mills are profit-making entities in other parts of the world. “There will still be more staffers than needed at the PSM, including those working at its hospital and schools.”
To this, the PSM lawyer replied that daily expenditure has been reduced from Rs200 million to Rs100 million.
After a recess, the top court was informed that the process of the steel mills’ privatisation will be completed by August.
Continuing to take the officers to task, the chief justice remarked that every institution of the country was functioning in similar conditions as the PSM. “Whether its the railways or the PIA, every institutions has a similar story to tell,” he said.
A week earlier, the government had reviewed and discussed the revival of Pakistan Steel Mills, which would be undertaken as per the cabinet’s decision wherein core assets of PSM would be transferred to a subsidiary owned wholly by the mills, followed by the sale of the majority shares of the subsidiary thus formed without transfer of full ownership.
In this regard, Federal Minister for Privatisation Soomro and Federal Minister for Industries and Production Azhar had co-chaired a meeting to review and discuss the progress made in the revival of PSM on Tuesday last.
Federal secretary privatisation, additional secretary industries, and other senior officials of the ministry had attended the meeting. PSM chairman and CFO participated via video-link.
According to a press release, the Ministry of Privatisation has been actively following the scheme of the arrangement, whereas the transaction structure had already been approved.
In the meeting, ministers had been briefed about the current status and progress and probable timeline for the completion of said transaction. Moreover, the other matters relating to the use of jetty, registration of a new subsidiary and others were deliberated upon in detail.
Soomro had said on the occasion that they must strictly follow the timeline and complete the task in the defined period. He along with Azhar resolved to extend their support to the maximum extent to solve the issues which may have arisen.
Hammad Azhar on November 29, 2020, had rolled out a restructuring plan for the PSM, according to which the mills would be run through private sector management to make it into a profit-earning organisation.
Addressing a press conference, the minister had said that the government had to take hard decisions to check losses inflicted on the national exchequer through State-owned Entities (SOEs) which amounted to around Rs200 billion, more than the country’s defence budget.
The minister had said the government wanted to make it profit earning organisation by involving the private sector and reducing over-staff.
He had said the government would hire a financial advisor, through a transparent bidding process, with whose consultation the Privatisation Commission would proceed forward to bring the PSM under private sector management.
In this regard, the first phase of the restructuring plan was witnessed when the Pakistan Steel Mills had sacked over 4,500 employees as part of a cost reduction exercise on November 27, 2020.
According to the PSM spokesperson, lecturers, non-teaching staff at schools and colleges, drivers, firemen, fire tender operators, health workers, security guards, gardeners, paramedical staff, cooks and office attendants had been “retrenched”.
The staff at the chief executive’s secretariat and professional degree holders are being retained, the spokesperson had explained.
The next phase would result in laying off of 95 existing employees of the mill, Azhar had explained previously. Each employee would get an amount ranging from Rs2 million to Rs 3 million. The total dues to be paid have been estimated at around Rs10 billion which would be paid timely.
He had said that out of 19,000 acres of land owned by the PSM, 13,000 would be leased to bear these expenditures.
He was of the view that had the decision been taken at an appropriate time, billions of rupees would have been saved that could have been utilised in development funding.
