Chief Executive Officer (CEO), Pakistan Steel Mills (PSM), Major General Muhammad Javed (Retd), has reportedly resigned to pre-empt the government firing him for poor performance well-informed sources toldBusiness Recorder. “I confirm that CEO, PSM has decided to leave the organisation and his resignation is on Nawaz Sharif”s table, who is the final authority to approve or reject his resignation,” the sources added.
Javed, sources said, made all out efforts to get another bailout package of Rs 11 billion for the loss-making entity but his arguments in favour of a package have failed to convince the policymakers. Cash requirements for the year 2013-14 would be to the tune of Rs 13.6 billion. The incumbent government is also actively considering the option of privatising the Mills that would at least save Rs 1.5 billion of the tax payers” money. Some insiders in the PSM argue that General Javed may have tendered his resignation as a pressure tactic to get the bailout package. The Ministry of Industries and Production recently submitted three options to the government to stop unending bleeding of financial resources.
The proposed options are as follows: (i) PSM may be privatised but this option cannot be exercised due to Supreme Court decision; (ii) PSM may be closed. This option may lead to over 15,000 people losing their jobs, a law and order situation may arise and the import bill of iron and steel products will rise resulting in an additional burden on foreign exchange reserves; and (iii) PSM may be revitalised.
PSM incurred losses of Rs 26.526 billion, Rs 11.566 billion and Rs 12.434 billion in 2008-09, 2009-10 and 2010-11 respectively. Losses for 2011-12 were Rs 22.273 billion. Analysts believe that losses in 2012-13 will be around Rs 30 billion as official documents depicted Rs 11.566 billion business losses in six months ended on December 31, 2012 and the pace of losses remains the same; these would escalate to historic level if Rs 8 billion burden of Charter of Demand of CBA and Rs 3 billion bills of SSGC is included.
It is pertinent to mention here that the government has already advertised a post of a professional CEO for running PSM and a Commission will interview the shortlisted candidates. This correspondent sent a SMS to Major General Muhammad Javed (Retd) asking him as to the reasons for his resignation but he did not respond till the filing of this story.
