PM approves bailout package for PSM


Prime Minister Mir Hazar Khan Khoso on Wednesday said the caretaker government has taken measures to rehabilitate Pakistan Steel Mills (PSM) so that it can contribute to the economic development of the country.
These observations were made by the premier during a meeting held at PM House to review a proposal for bailing out PSM.
The meeting was attended by Minister for Production Shahzada Ahsan Ashraf Shaikh, Adviser to PM on Finance Dr Shahid Amjad Chaudhry and senior officials of PM’s Secretariat.
During the meeting it was decided that the federal government would provide guarantees to scheduled banks for raising Rs 11 billion for PSM to meet its working capital requirement.
The meeting was told that PSM is working below its production capacity and with the availability of additional Rs 11 billion; PSM will be able to attain a production capacity of 50% to 60% within six months and full capacity in due course, which will help reduce its losses.
It was also decided that Rs 11 billion will be deposited in a separate escrow account which will be opened for this purpose only, and that all revenues generated from the sales would be deposited in the same escrow account.
The meeting also decided that Standard Operating Procedures (SOP) will be introduced for operation of the account to ensure that salaries and pensions of employees of PSM are not affected. The purpose of opening the escrow account is to ensure that finances being provided to PSM are used for the intended purpose of rehabilitating the project.