Mega unit suffers Rs 86 billion deficit

A total of Rs 40.50 billion was given to Pakistan Steel Mills (PSM) during the last four fiscal years as ”bailout packages” while Rs 85.772 billion was recorded total deficit of PSM as on June 30, 2013, the National Assembly was informed on Wednesday. 

Minister for Industries and Production Ghulam Murtaza Khan in a written reply to a question of Malik Shakir Bashir Awan told the House that the government had provided Rs 4 billion to PSM as a subordinated loan/Interest Free Loan: a Rs 3 billion loan in ”Bailout Package II” during financial year 2009-10 and Rs 1 billion in ”Bailout Package IV” 2012-13. The House was further informed that the amount of that bank loan which was given to PSM in terms of ”Bailout Packages” during the last four financial years from 2008-09 to 2012-13 was Rs 36.507 billion, including Rs 10 billion in ”Bailout Package I” 2008-09, Rs 6.907 billion in ”Bailout Package II” 2009-10, Rs 6 billion in ”Bailout Package III” 2011-12 and Rs 13.600 billion in ”Bailout Package IV” 2012-13. 

The Minister further told the House that the government allowed different commercial loans on exorbitant rates as “bailout packages”. The loan was received by PSM in instalments (small tranches) and after substantial gaps. Therefore, the required chain of raw material in line with production could not be maintained. The PSM therefore, continued its operations at low capacity for survival. He maintained that after payment of outstanding dues of the banks a limited amount was left for the procurement of raw material. The amount was insufficient to provide the desired results. PSM, therefore barely survived. 

Copyright Business Recorder, 2013

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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