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