KARACHI: Pakistan Steel Mills’ (PSM) shutdown for the last three week has added Rs53 billion losses to its Rs258 billion debts and liabilities in 16 months.
This is for the first time in three decades that the PSM has been shut down for such a long time just owing to poor maintenance and operational procedures.
Pakistan’s biggest industrial complex was closed on October 8, 2014 after one of its converters was damaged during operation.
Earlier this year, the government gave a Rs18.5 billion bailout package to PSM, after that its management had claimed to increase its production capacity by 50 per cent till October, and the mills would make Rs250 million in profit by 2015.
However, in the month of October, the plant was only able to produce 1870 tons, which is only 2 per cent of its daily capacity of 91,667 tons.
Now, the Privatization Commission has decided to appoint financial advisor by the end of next month of November to assist the government in privatization process of the PSM.
The government has also invited applications from financial advisors in regard to PSM’s privatization plan.
According to officials, operations were shut down for repairs and cleaning, but the plant is not likely to restart production in the near future.
Currently the PSM has around Rs260 billion of debt, which is only going to mount unless production capacity is improved and profitability is achieved by the PSM management.
