Pakistan Steel going gone almost out

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ISLAMABAD: The Board of Directors of the sinking Pakistan Steel, which has accumulated losses of Rs80 billion and liabilities worth Rs85 billion during the PPP government, is gathering in Islamabad today to discuss the business plans of the PSM and commissioning of Coke Oven Battery.

Sourcesprivy to the developments in Pakistan Steel told The News that the coke oven battery of PSM whose commissioning, the board is going to discuss on Wednesday, is the backbone of Pakistan Steel and because of shortage of coke and iron ore, this unit is at zero-production.

In October 2012 its efficiency was 6%, in September it was 14%, in August the efficiency was 19% and in July 2012 the efficiency was 21 % which was well below the standard efficiency rate, the sources added.

The sources said that since November 2011 this plant is on heating, while it was decided to run it for heating for only two months.The sources said that monthly wage bill of PSM has increased to the tune of about Rs860 million. From May to November 2012 in a period of 7 months the mill has suffered more than Rs12 billion losses. This is the period since when the new CEO of PSM has taken charge. He has previously remained Chairman of the board during 2006-08.

Fazullah Qureshi, Chairman Board of Directors PSM when contacted confirmed that PSM was going in deep losses because of the shortage of coke and iron ore. He mentioned that Iran was a major source of coke and because of sanctions on it; PSM’s coke supply has been choked.

He said that when there would be no production then of course there would be losses. He further mentioned that PSM also imported coke from India and now, India has stopped exporting coke therefore PSM’s performance has hit further low. Qureshi said that due to the situation of our country, no one was ready to do business with PSM but now the money has come and it is hoped that PSM would be back on track.

Regarding audit paras about the incumbent chief executive officer of PSM, the Chairman PSM Board said that those allegations and paras were old and were being discussed at appropriate levels. He mentioned that the incumbent CEO has joined a few months ago therefore he could not evaluate his performance now because there was no money with PSM and now government has provided the money, and performance of CEO would be evaluated after a few months.

While documents available with The News say that Chief Executive Officer of Pakistan Steel Mills, General (retd) Muhammad Javed faces audit para of Rs9.672 losses and the Public Accounts Committee had also discussed the para a few months ago.

This loss was incurred during incumbent CEO’s first tenure in PSM during 2006-08 and Moeen Aftab’s tenure as Chairman PSM for selling the products below the market price to the cronies of an important personality. Interestingly, the said losses were incurred during the tenures of General (retd) Muhammad Javed and Moeen Aftab as chairmen PSM, of whom one is languishing in jail while the other has been appointed as CEO PSM.
According to a letter of PAC dated April 29, 2010 “Para 106: Loss of revenue due to fixation of sale below market price; Rs9.672 billion; The chairman PAC directed that chairman

Pakistan Steel may fix responsibility for lower fixation of sale price of steel products and take disciplinary action against the concerned persons. Report to be submitted in one month’s time. The ministry of industries and production may hold a meeting with the relevant departments of the Pakistan Steel and Audit authorities to settle the para. The committee may be informed about the constitution of the price review committee and suggest ways to make this committee independent and transparent.

The committee directed that the price review committee should be revamped. Report may be submitted within fifteen days. Para 107: Loss due to non-recovery of extra freight Rs221.214 million: The PAC directed that the chairman may fix responsibility on the officer responsible for not invoking penal clause of the contract signed with Pakistan National Shipping Corporation and making over payments. Report in this matter may be submitted to PAC in fifteen days. It was also directed that procedural flaws in future contracts may be removed.”

According to FIA report submitted in Supreme Court on 1-2-2011, it has been revealed that the auditors coupled the period of two different incumbent chairmen Maj Gen (Retd) Muhammad Javed (from January to May 2008 and accused Mueen Aftab (FIR No. 39/2009) from June to September 2008.

Sources say that the chairman for four months is in jail and the chairman for five months is again appointed as CEO.

It merits mentioning here that presently PSM losses from July 2008 to November 2012 are more than Rs80 billion and payable liabilities are more than Rs85 billion. Losses and payable liabilities come to a total Rs165 billion in period of four years.


Courtesy: The News

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