Sources said that the issue of privatisation of PSM was discussed at a meeting of the Board of Directors (BoD) held on February 25 under the chairmanship of Fazalullah Qureshi.
According to sources, Shamshad Qureshi, the Chairman of PSM”s CBA, asked if the letter written by the Secretary Privatisation Commission was his own decision or he had been so advised by the government.
Answering his query, Secretary Production Gul Muhammad Rind informed the Board that the Minister for Production did not know anything about the letter hence, the Ministry of Production was not giving any importance to the letter.
After hearing the Secretary Production”s viewpoint, the Board recommended that the Ministry of Production should take up the issue with the Ministry of Privatisation.
The letter written by Secretary Privatisation stated that despite administrative and financial efforts made under the CCoR, the revival of PSMC remained “a pipe dream”.
Notwithstanding the bleak financial and administrative conditions, PSMC contains the potential to be revived subject to provision of sufficient funds, a competent professional management and independent and entrepreneurial decision-making.
The sources said, PSM incurred losses of Rs26.526 billion, Rs11.566 billion and Rs12.434 billion in 2008-09, 2009-10 and 2010-11 respectively. Losses for 2011-12 were Rs22.273 billion.
Analysts believe that losses in 2012-13 will be around Rs30 billion as official documents depicted Rs11.566 billion business losses in six months ended on December 31 last year and the pace of losses remains constant; these would escalate to historic level if Rs5.5 billion burden of the CBA”s Charter of Demand and Rs3 billion bills of SSGC was included.
The total impact calculated by the External Auditors works out at Rs5.5 billion to be shown as liability in the books of accounts in the year 2012-13 out of which Rs2 billion was in hand with another Rs1 billion to follow as grant.
Official documents reveal that CEO, Major General Muhammad Javed (retired) and Chairman Board Price Committee(BPC), Engineer M.A. Jabbar were seen holding each other responsible for delay in decisions.
The documents disclose that Engineer Jabbar showed reservation on an observation which said that BPC committee is responsible for delayed decisions, maintaining that this impression is not correct.
CEO PSM briefed the Board that BPC made delayed decisions which damages the mills badly. He argued that two tenders were articulated wrongly and subsequently their price comparisons were initiated and this delay affected the production plan adversely.
Engineer Jabbar informed the Board that as per TOR of BPC, when the tender is opened, the members of BPC are neither in tender opening, nor in tender technical scrutiny. After technical scrutiny the case is placed before BPC for financial opening and based on recommendations of technical scrutiny committee, financial are opened. BPC participates in financial opening and in competitor bidding. After this contract has been signed and price negotiated by the management finally LC is opened by the management.
“Our role is just to issue Letter of Intent(LoI) and if there is any difference between the statement and the ToR then BPC should be given the charge sheet also,” Engineer Jabbar added.
Engineer, Daroo Khan inquired from the Board if any BPC decision created losses for PSM.
After hearing the viewpoints of both sides, the Board decided to delete the objectionable words in the minutes.
Secretary Production, Gul Muhammad Rind, however, suggested that BPC members should also be changed because of their “extreme positions”.
CEO, PSM also suggested that a single Director should not chair two Board committees” at a time; and Board Price Committee and Board Audit and Finance Committee should be chaired by different Directors. This issue will come under discussion in the next meeting of the Board, probably to be presided over by the new chairman.