Rs 11 billion package approved for PSM bailoutMay 23, 2013
Karachi: Pakistan Steel Mill PSM will soon get Rs11 billion bailout package to overcome financial crises and move forward to revival and rehabilitation.
PSM spokesman Shazim Akhtar on Thursday said that that Ministry of Production moved the proposal bill and the care taker Prime Minister Mir Hazar Khan Khoso approved it on May 09, 2013.
He said that it was decided that entire bailout package would only be used for procurement of raw materials to enhance the production to 80 percent by the end of this year and in the first phase, 60 percent by the end of August 2013.
Akhtar said that a bank consortium was to be formed to work out the capital requirement of PSM. He said that an escrow account would be established and standard operating procedure would be introduced for meeting other current expenditures like disbursement of salaries, pension, employee benefits, plant maintenance and payment of utility bills and to give maximum transparency.
The spokesman said that PSM needs immediate release of Rs three billions to open the L/C and import iron ore to keep the wheels running and avoid the complete shutdown of PSM.
He said that in the light of above mentioned government bailout package decided by federal government, PSM had reorganized the maintenance, operational production strategies to get maximum benefit of the bailout package within minimum possible period.
Akhtar said that it had also been planned to establish a continuous supply chain of Iron Ore and Coal. He further said that it was imperative to mention here that the placement of shipment of above mentioned raw materials had been planned to maintain at least 90 days stock of raw material specially Iron ,Ore and Coal.
He said that behind schedule two month salaries payment, the PSM presented unprecedented atmosphere of industrial harmony.
“The facts suggested that the subject financial injection is unavoidable required to help averting PSM imminent shutdown in the end of June or July 2013” he added.
Akhtar said that it was suggested earlier in briefings with prime minister that a comfort zone must be created ensuring smooth PSM operations for four to six month to allow incoming government to consider PSM issues more deliberately.
He said that any delay or denial of enhanced L/C ceiling to Rs six billion would disrupt the logistics and production cycle beyond repair.
Akhtar said that the CPU will decline to a halt or possible shut down and such a situation should never be allowed to occur.