PSM losses de­cline to Rs 19 bil­lion from pre­vi­ous Rs 21.158bn

The Pak Banker - - NATIONAL -

Pak­istan Steel Mill (PSM) losses in 2012-2013 de­clined to Rs 19 bil­lion as com­pared to losses of Rs.21.158 bil­lion oc­curred in the pre­vi­ous fi­nan­cial year de­spite a bailout package.

The steel per­for­mance keep de­clined from 82% to 19% upto year 2011-2012 de­spite Rs.25 bil­lion three bailout pack­ages. The bailout package No.IV, which was given in Au­gust-2012 af­ter four months of join­ing of present Chief Ex­ec­u­tive Of­fi­cer was put into fact in Novem­ber 2012 on­wards.

Var­i­ous ex­ter­nal fac­tors kept de­lay­ing the process of im­prove­ment which ul­ti­mately started in Fe­bru­ary-March 2013. The pro­duc­tiv­ity has grad­u­ally im­proved to 25-30% which needs sub­stan­tially more funds to sus­tain and im­prove fur­ther.

Un­due re­peated fo­cus on present CEO in an in­sti­tu­tion which is suf­fer­ing losses since four years seem mis-planned, sim­i­larly re­peated men­tion of his pay and al­lowances which are com­pa­ra­ble to other CEO's and MDs of dif­fer­ent government or­ga­ni­za­tions also seem slanted. Pak­istan Steel Mill is mak­ing all ef­forts to stay op­er­a­tive in­spite of great fi­nan­cial dif­fi­cul­ties. The PSM af­fairs should be viewed within the larger prospec­tive of its mount­ing losses and li­a­bil­i­ties since a ma­jor dis­rup­tion which took place in 2009. It may fur­ther be re­called that PSM was in profit through con­sec­u­tive years till June-2008. It has the po­ten­tial to re­vive, pro­vided all fi­nan­cial li­a­bil­i­ties & markups on pre­vi­ous loans are taken care of sep­a­rately by al­lo­cat­ing re­quired funds for pro­duc­tion with­out ex­ter­nal fi­nan­cial in­cum­ber­ances.

The bailout package No.IV given in 2012-2013 worth Rs.14.8 bil­lion had three seg­ments. Firstly it con­tained Rs.4.5 bil­lion as markup on pre­vi­ous loans, se­condly Rs.6.5 bil­lion were al­lo­cated on pre­vi­ously de­faulted LCs and pay­ment of util­ity bills, only Rs.3.8 bil­lion were left for lo­gis­tic, pro­duc­tion and re­vival. PSM need a holis­tic view of es­sen­tially a fi­nan­cial is­sue like a whole­sum package given to it in 1999-2000, which helped it to be­come prof­itable in short span of two to three years.

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