Pakistan Steel Mills requests for additional Rs13 billion from the federal government
4 February 2015
The nationwide blackout about a week ago that plunged most of the country into darkness had also badly affected the production levels of Pakistan Steel Mills (PSM).
However, one of the two blast furnaces of the PSM resumed production three days ago while the other will start working in the next few days, said PSM officials.
This has happened at a time when the PSM management has requested an additional Rs13 billion from the federal government, which is separate from the Rs18.5 billion package already paid to the mill.
Apart from Rs13 billion, which the mill will repay to the government in the next few years, another Rs4.5 billion is requested for paying the salaries of employees, a PSM spokesperson said on Tuesday.
The production of the mill had been increased from 1.4% of the capacity in April 2014 to 30% in December 2014 with the help of the financial restructuring package of Rs18.5 billion by the government.
With the current package, the production capacity will reach 77% and in order to sustain and boost the production to 100%, which is 1.1 million tons, an additional amount of Rs13 billion has been requested from the government, a PSM press release said.
During the last six years, the plant has not undergone any capital repair, which is now necessary. Instead of all the issues and condition of the plant, the management is confident and bound to fulfill its commitment to achieve 77% production capacity, it added.
This amount will not only help achieve 100% production level, but will also add to asset-building of the national enterprise. With the help of the recent financial restructuring package of Rs18.5 billion, the losses of PSM have been reduced by Rs9 billion. Next year, these will further come down by Rs20 billion.
He added that Rs4.5 billion has been requested for payment of three-month salary and utility bills. Due to the late receipt of iron ore (September 22, 2014), the target was also pushed by three months which is April 2015, this amount will also be used to pay salaries during the extended period.