Islamabad: Pakistan Steel Mills management itself presented a plan to axe half the daily-wage employees and a third of the contractual ones by next month, in an effort to cut down on the salary expenses.
“The management of Pakistan Steel Mills (PSM) has a plan to reduce the daily wages staff from 918 to 430 and contract employees will be reduced from 230 to 161 by June 2016,” the Economic Coordination Committee (ECC) was informed in its meeting held on May 7.
A previous meeting of the PSM board was scheduled for April 4, 2016. But lack of quorum meant that the meeting would be postponed, it was informed. Furthermore, the management had taken various measures in the meantime to cut down expenditures against various heads.
The management has been encouraging regular officers and staff to avail earned leave (EL) and extraordinary leave (EOL) without pay and allowing employees to avail leave preparatory to retirement (LPR) instead of encashment of earned leave on retirement.
It was informed that a reduction in monthly salary projections from Rs435 million to Rs390 million was expected by next month.
At present, the mill has inventory worth around Rs387 million only while inventory worth Rs4.5 billion was of unfinished material (slabs) which could be sold in the local market once the gas supply has been restored to enable PSM to convert the slabs into finished products.
The ECC was informed that even the slabs could be sold in the local market if concerted efforts were made.
PSM had on multiple occasions requested the Privatization Commission (PC) to allow it to sell its available inventory to meet additional unavoidable expenses amounting to Rs190 million per month in addition to the salary expense released by the ECC.
However, the commission had not permitted PSM to carry out the liquidation and instead had stated that the decision had to be taken by the ECC.
In view of the fact that PSM employees had not been paid salaries for the past four months and the current sellable inventory was not sufficient to meet the salary expenditure, the ECC of the cabinet was requested to consider the proposals on humanitarian grounds and in view of the holy month of Ramazan/ Eid.
It was requested to release Rs1,733 million for four months’ salary and permit PSM to generate funds amounting to Rs190 million through the disposal of inventory. If liquidation of stock was off the table, the Government of Pakistan was requested to release the requisite amount as additional expense.
In view of the fiscal constraints faced by the federal government, the finance division proposed release of only two months’ salary (Rs858 million), whereas the remaining would be considered in the first week of July – immediately before Eid.
The ECC approved the proposal to release two months’ salary.
