Amid deepening uncertainty over the status of board of directors of the Pakistan Steel Mills (PSM) that is delaying a decision on restructuring before privatisation, the federal government has approved payment of two-month salaries to the employees of the state-owned industrial giant.
The decision to pay salaries for December and January was taken by the Economic Coordination Committee (ECC) of the cabinet, which met under the chairmanship of Finance Minister Ishaq Dar here on Friday.
The PSM’s two-month wage bill will cost the public exchequer Rs960 million, according to a handout issued by the Ministry of Finance.
The Ministry of Industries and Production had sought approval for salaries of four months in an effort to ease the woes of thousands of employees of the mill, which was virtually shut down and running at less than 3% of capacity, said officials of the Ministry of Industries.
However, the Ministry of Finance refused to bear the four-month bill, which amounted to roughly Rs1.9 billion.
Issues pertaining to the delay in approval of a restructuring plan leading to PSM’s privatisation and constitution of the board of directors were also raised during the meeting.
Prime Minister Nawaz Sharif had recently approved a four-member board, which fell short of the statutory requirement of five members, the officials said.
Lately, the Prime Minister’s Office clarified that the four members were in addition to the already constituted board, a justification that seemed to be irrational as the two new members were already performing on the old board, according to the officials.
The premier had nominated Industries Secretary Shafqat Naghmi and Privatisation Secretary Amjad Ali Khan along with two professionals from the private sector as members of the PSM board.
At present, there is no chairman of the board. New rules issued by the Securities and Exchange Commission of Pakistan make it binding that the chairman should be from the private sector and elected by the board.
The delay in constitution of a permanent board was also putting off approval for the restructuring plan, officials of the Ministry of Industries said.
Ishaq Dar directed the Privatization Commission (PC) to bring a proposal for restructuring of the PSM in the next ECC meeting, according to the handout.
However, PC Chairman Mohammad Zubair said the restructuring plan had been finalised. The plan revolves around reviving the PSM, which requires a huge financial injection for working capital and payment of salaries. It also talks about privatisation with clear deadlines to achieve the goal.
The ECC also approved a proposal of the Federal Board of Revenue to dismantle unserviceable confiscated tampered vehicles. It decided that body parts of these vehicles would be put up for auction.
The dismantling of the vehicles will be made under supervision of the committee in a transparent manner and chassis number would be made unusable.
The ECC also agreed that no NOC for the transfer of scrapped vehicles would be issued to anybody including the excise and taxation or motor registration authorities.
The ECC also approved reimbursement of transportation cost of high speed diesel (HSD) to Pak Arab Refinery Company, giving a huge benefit to the company. The freight cost will be paid from the Inland Freight Equalisation Margin (IFEM) with the direction that the Oil and Gas Regulatory Authority (Ogra) would take into account this factor with effect from April 1.
The ECC constituted a five-member committee to determine the factors that were hindering production of fertiliser at full capacity by the local industry. The committee will present its report in the next ECC meeting, suggesting whether the government should undertake import of fertiliser or bank on domestic industry for meeting the demand for Kharif sowing season (April-September).
The ECC was informed that keeping in view demand and production there was a need to import 171,000 tons of fertiliser by the Trading Corporation of Pakistan. In addition to this, the Planning Commission has recommended that 200,000 tons of urea may be required for keeping strategic reserves.
Published in The Express Tribune, March 22nd, 2014.
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