The Pakistan Steel Mills stopped its commercial operations in June 2015 without formulating any plane for its 14,753 employees, said the Ministry of Industries and Production in a reply submitted to the Supreme Court on Tuesday.
The workforce was cut down to 8,884 in 2019, of which 2,233 are officers and 6,651 workers. The report said that the government spends Rs355 million every month in net salaries to the employees, adding that this excludes leave encashment, provident fund or gratuity.
The government has spent Rs34 billion in net salaries so far and paid Rs1.2 billion to deceased employees on compassionate grounds. “Since 2008-2009, the government has disbursed Rs58 billion to PSM five bailout packages for its survival,” according to the report. Even the SSGC was told to not disconnect its supply to the mill even though it owes the gas company Rs22 billion.
It said that an expert group was formed in 2018 to work on the revival of the mills. It recommended that a public-private partnership should be established to “raise necessary capital investment and obtain technical expertise for the revival of the mills”. It even said that the government should appoint a technical advisory consortium to design a mechanism for the transparent international bidding process.
The report that the payment to the sacked employees “shall be contingent upon the decision of the Supreme Court and the payment calculated shall be final once for all and shall not accrue any further liability against the government of Pakistan”.
The Pakistan Steel Mills, which is owned by the federation, is engaged in the manufacture and sale of iron and steel. It is spread over 18,642 acres, of which 10,000 acres is for the Mills while 8,000 is for Steel Town, a residential area, hospital and school.
The Mills have been running in a loss since 2008 and were eventually shut down in 2015. It has caused losses of Rs229 billion to the national treasury.
The Supreme Court is expected to take up the case of the Pakistan Steel Mills employees. A bench headed by Chief Justice Gulzar Ahmed and comprising justices Ijazul Ahsan and Sayyed Mazahar Ali Akbar Naqvi will take it up.
On June 3, the Economic Coordination Committee approved firing all employees of the Pakistan Steel Mills. A Rs20 billion package has been prepared for the employees and each of them will be given at least Rs2.3 million as golden handshake