ECC approves Rs11b for PSM rehabilitation

Our Staff Reporter KARACHI - Finally government has decided to save national asset Pakistan Steel Mills (PSM) by injecting Rs11 billion in two instalments. In a recent meeting, ECC gave an approval of about Rs 11 billion package against the proposed business plan submitted by Pakistan Steel Mills management. Out of which Rs6 billion in first phase and Rs5 billion in coming month will be given in order to pull out PSM from financial crisis. This amount will help PSM to solve major problem of raw materials availability and enhance the production capacity. Sources told that PSM will utilise this money in procurement of raw materials. Currently, PSM is running in low capacity production due to non-availability of raw materials because of liquidity crunch. Pakistan Steel faces a net loss of Rs26,526m in 2008-09 which resulted into continuous erosion of its liquidity to buy raw materials which was further complicated due to the global recession, volatile prices of raw materials, high freight rates, devaluation of rupee and unjustified SROs. Pakistan Steel has a history of achievement which was a profitable industry from year 2000 to year 2008. It has contributed about Rs100b in government kitty as taxes and duties and Rs1b as dividend whereas its construction and erection cost was only Rs 25b. Russia has shown interest in the expansion plan of PSM from 1.1 MMT to 3 MMT per year. Bilateral talks in this regard are in progress. Pakistan Steel current 1.1 MMT capacity could only cover the 20pc need of the country. PSM management has ensured that the injected amount will be used only for the betterment by overcoming shortage of raw materials and increasing production capacity.

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