ISLAMAABD - The federal government, on Thursday, defended the decision of firing all employees of Pakistan Steel Mills saying that it would revive and steer the country’s largest industrial unit out of losses.

Federal Minister Industries and Production Hammad Azhar said the government had decided to privatize Pakistan Steel Mills in order to revive the unit and steer it out of losses. He said the employees of the Pakistan Steel Mills (PSM) would receive Rs 2.3 million on average after the Economic Coordination Committee (ECC) relieved the funds under golden handshake scheme.

Addressing a press conference, the Minister said that 15 parties had shown their interest in Pakistan Steel Mills.  He clarified that only the core Steel Mills operation would be privatized and not the other land of the entity.  The employees of Pakistan Steel Mills would be relieved in two phases with payment of their retirement dues and one month salary, he added.

Hammad Azhar said that the PSM issue had been ongoing for a decade and its loan had exceeded Rs230 billion. The PSM went into deficit in the Pakistan Peoples Party (PPP) tenure and was closed in the Pakistan Muslim League-Nawaz (PML-N) government in 2015. “The federal government pays Rs 70 million per month in terms of salaries, losses and interest of the mill whose future must be decided. Rs 55 billion were paid in salaries in last five and half years. There is no fault of the workers in shutting of the mill,” the Minister said.

The Federal Minister further said, “The PSM went into deficit in the tenures of those political parties which were criticizing the government’s decision yesterday. They are only busy in political point scoring. The ECC’s proposal will be presented before the federal cabinet.”

The ECC, on Wednesday, had decided a golden handshake scheme for 9,100 employees of PSM, which would cost around Rs20 billion to the national kitty. Of the total 9,350, only 250 employees would be retained for a period of 120 days for the execution of the plan and other necessary work. Remaining 9100, employees, would be issued termination notices under the plan. The financial impact of the plan would be of Rs19.657 billion that would be needed in a single tranche to pay gratuity and provident funds of PSM employees. In addition to this, one month salary would be paid to PSM employees from the approved supplementary grant on account of salaries of PSM employees. Thus, the average payment per employee comes to Rs2.3 million in case the proposed scheme is implemented. The move will not be finalised until it is approved by the federal cabinet.