The Economic Coordination Committee of the cabinet on Wednesday reviewed a proposal to terminate over 9,000 employees of the Pakistan Steel Mills, which has remained closed for last five years.
The ECC discussed in details the issue of retrenchment of all the 9,350 employees of the PSM who have been receiving salaries despite the country’s largest industrial unit remained closed since June 2015.
Neither the PML-N had nor the PTI government has a plan to revive the mill as long as it is in the public sector. The PML-N government had shut the PSM in June 2015, and since then the employees are getting salaries but with a significant lag. The retiring employees are also not paid their retirement benefits.
“The ECC also took up a proposal by the ministry of industries and production regarding the human resource rationalisation of workforce of the Pakistan Steel Mills at a cost of Rs18.74 billion to be paid for retirements and termination dues of over 8,000 of 9,000 PSM employees”, the finance ministry said.
“The ECC discussed the proposal in detail and asked the ministry of industries and production to re-work the scheme in consultation with the PSM management to extend its scope to a maximum number of PSM employees and bring it back to ECC,” it added.
On April 15, the PSM Board of Directors had approved the plan to retrench over 8,000 employees of the PSM and give them monetary benefits. But the ECC argued that there was no justification for retaining the remaining employees when the mills remained closed.
The monthly salary bill of the PSM employees is Rs350 million and since June 2013 the federal government has given Rs34 billion subsidy to pay these salaries. The Supreme Court has also directed the government to find a solution to the PSM issue.
The ECC was informed that average age of the PSM employees was 47 years against private sector’s average of 36 years. It heard that 48 per cent of the PSM employees were between the age group of 51 to 60 years, which, the ministry said, was a hurdle in its privatisation.
The privatisation ministry and the finance ministry have endorsed the plan to terminate the employees. The privatisation ministry has also hired financial adviser for due diligence of the PSM but the process remains incomplete. The PSM management has not yet given the latest audited financial statements of the mills to the privatisation ministry, which is delaying the finalisation of the report.
