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Losses of Pak Steel Mills reach over Rs170 billion, PAC told

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The Public Accounts Committee (PAC) was informed on Tuesday that the arrears and losses of the Pakistan Steel Mills (PSM) had reached over Rs170 billion and now the government had decided to privatise it.

The committee was informed that even Russia and China had refused to revive the mills, as it had incurred Rs22 billion losses so far this year. The committee met here with Syed Khursheed Shah in the chair.

Audit para related to the Ministry of Industries and Production and its attached department for the year 2013-14 came under discussion during the meeting. Examining the audit para related to the PSM, the audit officials told the committee that the arrears and losses of the mills had reached Rs170 billion. The committee was told that the mills was getting a marginal profit from year 2000 to 2008 and from 2008 till date the losses were increasing day by day.

Khursheed remarked that gas supply had been disconnected and no supply was provided to the PSM. He said only Rs2 billion was being provided to the mills as subsidy which was spent on paying the salaries of employees.

“It could only be operation if instead of paying subsidy of Rs2 billion lump sum amount is paid for operations to make it a profit-earning state entity,” he said and added that the mills could do it if it ran on 70 percent capacity.

The committee admitted that neither the PPP nor the present government had provided sufficient funds to the mills to make it operational, as it needed a lump sum amount to start its operations.

He said 50 percent of steel mills in private sector were also facing losses due to import of cheaper steel from China. Mehmood Khan Achakzai remarked, “Another East India Company is in the offing”.

Syed Khursheed Shah remarked that even Russia and China were not interested in running the Pakistan Steel Mills. He observed that 20,000-acre land of the mills valuing over Rs20 billion was more precious.

Achakzai observed that the mills could be revived and made operational if its land was saved from the land mafia. Examining another audit para, the PAC raised serious questions about the performance of the NAB for not arresting three ex-officials of a subsidiary department of Ministry of Industries and Production who made wasteful expenditureon purchase of machinery, non procurement of laser cutting/marking machines and irregular procurement causing a loss of over Rs300 million to the national exchequer.

The issue was raised when the officials of the Ministry of Industry and production told the committee that they had referred the case to the NAB for investigation. When the committee asked the NAB officials about what action they had taken on it so far, they said the reference had been filed with an accountability court. But when the committee asked what action was taken against those officials who were involved in the scam, the NAB officials replied that the reference was filed and it was in stage of hearing before the accountability courts.

Sardar Ashiq Gopang, who was chairing the PAC in the absence of Syed Khursheed Shah, remarked that the 90 days remand showed and the filing of reference showed that there was credible evidence against them.

Gopang remarked that when the NAB was taking politicians and others in custody for 90 days during inquiry stage then why they did not take the same action against these officials. Abdul Rashid Godel remarked that 90-day remand was only for the residents of Karachi.

Mehmood Khan Achakzai remarked that a person involved in a lesser crime like the theft of a bicycle was put in jail while those who had robbed billions were roaming freely. The committee directed the NAB to furnish with it the present complete record of investigation and reference of the case.

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