PSM needs to pay off huge wage and utility debt

The Pakistani Steel Plant (PSM) plans to ask the federal government for a bailout to pay PKR 13 billion in overdue wages to its workers as financing for the country's largest steel production becomes more volatile and difficult.

The Ministry of Industry is preparing a summary to invite the Economic Coordinating Committee to provide more funds to the steel plant to pay off wages and utility bills that are overdue since November 2014.

A Pakistani steel mill said it would need PKR 13 billion to resolve the crisis, as well as funds for future use. PKR 4.5 billion will be needed to pay salaries from November 2014 to April 2015 for 15,500 employees and PKR 8.5 billion for large-scale utility bills. The plant has already received PKR 18.5 billion since May 2014 under the current financial assistance package. A financial assistance package was provided to support the management plan that will lead to a significant increase in production by February 2015.

A PSM spokesman noted that the plant is loaded with an average of 30 percent of production capacity. The sources added that the integrated metallurgical complex has provided an average of 16 percent of production over the past six years. The government of the Pakistan Muslim League Nawaz plans to give a major boost to the PSM production previously planned for privatization, which is expected to take place during the current year.