ECC Approves Firing All Pakistan Steel Mills Employees

The Economic Coordination Committee (ECC) on Wednesday 3rd June, approved to relieve the Pakistan Steel Mill workers of their duties.

A meeting of ECC under the chairmanship of Abdul Hafeez Sheikh, Advisor to Prime Minister on Finance and Revenue approved a Rs. 18 billion package for the employees, which amounts to Rs. 2.3 million per person in the form of a Golden Handshake. There are approximately 8,500 employees who were given a one month notice and will be relieved of their duties.

The Mills have been inactive and the employees haven’t had any work to do, reasoned the committee. As the Mills were inactive, the total losses and liabilities have gone over Rs. 500 billion, also the country suffered a loss of around $2.5 billion per annum in foreign exchange due to the import of steel that wasn’t produced.

The mill went into heavy losses during the Pakistan People’s Party (PPP) era and was shut down during Pakistan Muslim League’s (PMLN) time. When it was shut down it had a capacity of producing 0.3 million tonnes of steel and that too at a heavy loss. Whereas, the private steel sector produces around 7 million tonnes and pays close to Rs. 80 million in taxes each year.

In March, the Supreme Court of Pakistan also showed annoyance at the state of affairs of the Steel Mills. The Supreme Court in its decision stated:

The Steel Mills is lying closed since June 2015 but its employees are claiming all sorts of benefits including increments, promotions, and other perks and privileges. We are unable to understand how when the steel mills itself is not operating and producing anything why the employees are employed there and from where the payments are being paid to them by way of their emoluments and other benefits.

According to the government’s point of view, the Federal Government pays Rs. 350 million every month on salaries of employees who are doing nothing since the mill closed in 2015. The matter of the existing employees and debt has to be handled before the mill can be privatized. The privatization plan involves leasing out only the core land of the mill while the remaining land will still be owned by the Steel Mills Corporation.

This move will not be finalized until the federal cabinet approves it.

  • Good step, this should have been done long before. Billions & Billions of tax payers money was being drained unnecessarily. Now employees would get handsome amount in Golden hand shake, while almost 60% of experienced staff would be reemployed by new management to run the mill.

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