Govt plans to lay off 8,000 PSM employees, ECC told.

Byline: Khaleeq Kiani

ISLAMABAD -- The government plans to terminate the services of over 8,000 remaining staff of the Pakistan Steel Mills (PSM) - the country's largest but closed industrial unit - through a compensation package of about Rs19 billion.

A meeting on Wednesday of the Economic Coordination Committee (ECC) of the cabinet presided over by Prime Minister's Adviser on Finance and Revenue Dr Abdul Hafeez Shaikh had an initial discussion on the 'Human Resource Rationalisation Plan' for PSM, worth Rs18.74bn.

The ECC also took up a proposal of the petroleum ministry for hedging of oil imports, but the summary was withdrawn by the ministry.

The ministry of industries and production has come up with the plan for rationalisation of the workforce of PSM costing Rs18.74bn, which is to be paid in retirement and termination dues to over 8,000 of the 9,000 employees.

The committee discussed the proposal in considerable detail and asked the industries ministry to resubmit the proposal after reformulating it in consultation with the PSM management so that its scope could be extended to the maximum number of PSM employees.

Rs19bn compensation package to be offered to workers

The failure of the country's 'mother industry is an unending story of unchecked corruption, inefficiency, and over-employment', according to an earlier summary submitted to the ECC. The PSM has been closed since June 2015, when its gas supply was drastically curtailed for non-payment of bills that were significantly lower than the default of a private sector entity at the same time.

The stakeholders of the PSM have been demanding of the federal government to order an in-depth and 15-year audit of the mills' performance that led to its closure and loss of more than 2,000 acres of its precious land to land grabbers.

The total losses and liabilities of the mills have gone beyond Rs500bn, besides about $2.5bn in foreign exchange loss per annum to the country because of import of steel that should have been produced at the PSM.

The governments have been paying...