PSM stakeholders urge action to halt financial losses

ISLAMABAD: A group representing stakeholders of the Pakistan Steel Mills (PSM) has appealed to the National Assembly Standing Committee on Industries and Production to take urgent action to halt further financial losses at the state-owned enterprise.

In a letter addressed to Chairman Syed Hafeez-Ud-Din and Secretary Malik Aamir Hussain of the committee, the PSMC Stakeholders’ Group called for the cancellation of the appointment of Asad Islam Mahni, Additional Secretary-1 of the Ministry of Industries & Production, as the acting CEO of PSM. The letter dated August 26, 2024 available with ‘The News’ claims this appointment violates the State-Owned Enterprises (SOEs) Act 2023.

It noted that despite prior communication with the ministry, there has been no response. The group presented the case on August 15 before the committee, countering what they called a “one-sided briefing” by the Ministry of Industries & Production (MOI&P) regarding PSM.

Earlier, Labor Union (CBA) PSM on July 13 and the chairman of the PSM Board on July 16 had written letters to secretary of MOI&P underscoring concerns over the issue.

Notably, the standing committee has established a sub-committee, on August 16, to address the ongoing financial and administrative challenges, particularly those related to PSM employees and operations. This sub-committee is expected to submit its report within 30 session days.

Financial data from the stakeholders group indicates that PSM incurred losses of over Rs6 million per hour and Rs140 million per day during the 2022-23 financial year. Despite being removed from the active privatization list by the caretaker government in October 2023, and directions from the SIFC Apex Committee to develop viable options for PSM’s future, a committee formed on April 24, 2024 by MOI&P is yet to convene a meeting. According to the stakeholders, these delays have resulted in an additional Rs40 billion in losses and increasing debt liabilities.

The letter also criticized Mahni’s actions since assuming the CEO role, citing his absence from critical meetings, including those of the Senate Standing Committee and the National Assembly Standing Committee. Additionally, stakeholders pointed to operational missteps, such as the disconnection of gas supply and failure to extend contracts for key personnel, leading to significant material thefts.

The PSMC Stakeholders Group proposed that PSM’s revival could solve employee issues and benefit other stakeholders. They argued that local expertise could restore the mills if the government took responsibility for reconstituting a knowledgeable board of directors, appointing professional management, resuming control of PSM land, investigating losses from 2008 to 2024, and holding accountable those responsible for financial mismanagement.

The group expressed its willingness to collaborate with the government on PSM’s revival, emphasizing that it could create jobs for local technical workers, reduce import bills, support the balance of payments and eliminate private sector monopolies in the steel market.