ISLAMABAD: The Privatisation Commission (PC) has requested Finance Minister Ishaq Dar to approve Rs 322 million for payment of gratuity, provident fund to the legal heirs of 138 deceased PSM workers on humanitarian grounds, official sources told Business Recorder.

PSM is the largest and the only integrated steel plant of Pakistan, with an installed production capacity of 1.1 million tons per year (MTPY), expandable up to 3.0 million ton per annum. Till 2008, it had accumulated profits of Rs.9.5 billion and was a self sustainable entity. It was making timely payments of all dues to not only its employees but also all its creditors. However, in financial year 2008-09, PSM suffered heavy losses of Rs.26 billion due to international recession and subsequent reduction in steel prices. Since then, PSM has not been able to recover and has consistently reduced its capacity utilization despite having given various bailout packages from year 2009 up till year 2014.

The sources said, due to previous recession, which led to the financial downfall of PSM, the PSM employees have only been paid net cash salaries. Accordingly, in doing so, the contributions in the provident fund and the gratuity fund trusts have not been made since 2008.

As of December, 2015, an amount of Rs.19.8 billion towards the provident fund and Rs.17.8 billion towards the gratuity is payable in both the trusts. However, it is worth mentioning here that the payments to ex-employees on account of gratuity has been cleared by PSM till April, 2013 and on account of the provident fund till April, 2015, respectively from the previously available funds in both the trusts. At present, both the funds stand completely exhausted, and resultantly, there are no funds available to release payments to the retiring employees of the PSM.

PC has submitted that certain employees of PSM who were not paid their outstanding dues have now expired. The families of such employees are suffering severe hardships and are regularly approaching the management of PSM for the settlement of their dues. Besides, the deceased employees, a few ex-employees have filed suit for payment of their legal fees.

It may be noted that a total of Rs 4.5 billion, an amount of Rs 322 million will be paid to legal heirs of 138 deceased employees of PSM.—MUSHTAQ GHUMMAN