Pakistan Steel Mills, the largest industrial complex of the country, has not been functioning for the last seven months due to suspension of gas supply. The Mills owesover Rs 39 billion to the Sui Southern Gas Company in terms of outstanding bills, out of which Rs 19.1 billion was the principal amount and Rs 20.8 billion wasthe late payment surcharge. According to the Ministry of Industries and Production, the production capacity was increased by a package of Rs18.50 billion and in July last year it was decided that the supply should be restored and the Mills would pay the bills later on. However, Sui Southern Gas Company did not agree with the decision and the plant is still in non-operation mode.
Meanwhile, the total liabilities of the industrial concern have crossed Rs 365 billion, clearly indicating a fact that the giant complex is no more an asset, but a burden on the national exchequer. The government ministers blame the management of the Mills for the whole state of affairs and only Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar are in position to dig out the whole truth and resolve the issue. On another note, the management has informed the prime minister about the current situation in the mills. The plant was not in operation due to unavailability of gas and lack of government support whereas the Mills had attained 65 percent capacity utilisation until March 2015 from less than 10 percent a few months ago.
According to the management, there is a need to restore gas pressure and ensure Rs8.5billion funds to operate the Mills until June 2016. Otherwise, the closure of the plant will cost an additional sum of Rs400 million to the national exchequer along with Rs380million per month salaries of the Mills employees. As a matter of fact, pressure is mounting on the government to sell the loss-making government organizations and the Steel Mills has become a white elephant. Sooner the government rids itself of it, the better. The Mills is closed, but the federal government has to release funds to disburse salaries among its employees. Unfortunately, the biggest industrial concern of the country has been recording zero production for the last seven months, but it is causing Rs2billion per month losses to the national exchequer. A further delay will add insult to injury and the government must find a way out.
