The government has reduced the salary expenditure of Pakistan Steel Mills (PSM) by cutting jobs in an attempt to ease the burden on the national exchequer.
This was told at a meeting of the Economic Coordination Committee (ECC) held on March 2, according to media sources.
Privatisation Division told the ECC during the meeting that a committee comprising representatives of Privatisation Division, Finance Division and PSM was formed on January 29, 2016, to examine and verify the salary bill of the steel mill.
After a number of meetings between all the stakeholders, it was decided that the salary bill for the mill’s employees will be reduced to Rs380m per month from March 2016 after rationalising the workforce working on contract and daily wage.
Accordingly, salary bill in November 2015 was Rs435m and was brought down to Rs380m in March 2016. In November 2016, the mill had 281 daily-wage employees and 191 contract staff.
Despite being given bailout packages worth Rs56.45b, the mill is still incurring huge losses. Its accumulated losses amount to Rs177.78b and liabilities stand at Rs138b. It also has to pay Rs14b in interest to the National Bank of Pakistan (NBP) out of total loans of Rs36.3b.
