This issue of outstanding liabilities of retired employees came under discussion in the meeting when the committee Chairman Senator Ahmad Khan, angrily informed the committee that "last night" he received a call from a retired employee who was in tears as he did not have money to buy his brother's shroud. When he sent his driver to check the authenticity of the caller's claim, he found it to be correct.
Chairman Standing Committee stated he was not bothered with what the government decides to do with respect to the PSM but he would go to the last limit to resolve the issue of retired employees. His views were supported by other Senators ie Dr Asif Kirmani, Senator Kalsoom Parveen, Senator Naseebullah Bazai and Senator Sitara Ayaz.
Secretary Industries and Production, Aamir Ashraf Khawja informed the committee that his Ministry had prepared a summary for the ECC for a loan of Rs 15 billion to clear the outstanding dues of retired employees but the proposal could not sail through the ECC as Finance Division did not support it, saying that they can not afford it due to financial constraints. He proposed that Secretary Finance should be invited to the next meeting of the Standing Committee to determine some solution to this issue.
Secretary Industries and Production also brief the committee on the last status of PSM which is inflicting over Rs 1.5 billion financial loss per month. He said that Privatisation Commission had invited applications from Financial Advisor for transaction advisory services through a suitable mode as provided in PC Ordinance 2000 but the response was not encouraging. He said PC has again sought an EoI for appointment of Financial Advisor - the last date for the submission of an EoI is October 7, 2019.
The PSM revival plan on Public Private Partnership (PPP) basis, adopted by the Ministry of Industries and Production appears to be leading to another disaster as the government has failed to stop the entity's financial bleeding.
The Convenor of Stakeholders Group, Mumraiz Khan, told the committee that PSM losses and liabilities have crossed Rs 500 billion as on August 2019 as compared to Rs 10 billion accumulated profit as on June 2008. He said PSM management "fraudulently" used Rs 53 billion of gratuity, Rs 18 billion of provident fund and Rs 12 billion of dealers, suppliers and contractors.
He further argued that if the import tariff is rationalised, the mills can run in profit of Rs 100 billion per annum. He said that PSM has been destroyed for the benefit of four or five steel sector tycoons. If there is corruption then why the Ministry of Industries and Production does not take action against those involved, he asked. The entire members of Standing Committee and Ministry's officials remained silent in response to the accusations of Mumraiz Khan. He claimed that PSM and the country's economy faced $ 11 billion financial loss to the national exchequer from 2006 to 2019 due to "flawed decisions", adding that no one in government is ready to talk with the Stakeholders Group who have formulated a PSM revival plan.
The Senate Standing Committee was also given a briefing by Utility Stores Corporation with 188 franchises in the country with 4,041 regular stores and 12,869 total employees. The Committee was told that Utility Stores Corporation is not getting any subsidy or grant for its operational expenses since 2014 and everything is being run from gross profit margin of the sale proceeds. The corporation suffered a Rs 512 billion net loss up to March 2019. The Committee strongly recommended reviving the subsidy and giving tax exemption to the corporation to provide better products at a low price for general public.
The MD Utility Stores Corporation Omer recommended rerouting the BISP purchases through the utility stores as it will help utility stores corporation to convert losses into profits. The Committee was told that high sales targets can be achieved if the inventory is sustained throughout the year. Canteen Stores Department (CSD) is exempted from taxes and this facility should also be extended to USC, he stated.
Managing Director USC informed the committee that the government had withdrawn subsidy on sugar in 2014. Senator Dr Asif Kirmani criticized the decision, saying he would be against such a decision even if Ishaq Dar took it. He suggested that the reasons for withdrawal of subsidy should be probed.
The Senators, however, complained about lack of quality of products being sold at USC outlets. However, Managing Director USC argued that Public Procurement Rules are the main hindrance in procurement of quality products.
The corporation has made a strategized work plan to achieve its targets by taking the current margin of sales from 8.67% to 10.17%, up-gradation of stores, hyper markets, improved branding, collaborating with BISP on Ehsaas Card Scheme, ensuring direct supply of stocks, and induction of high margin products. Reverting to TCP for purchase of sugar, purchasing wheat grain from PASCO to be milled on contractual prequalified flour mills and having a proper IT strategy was also discussed.
The meeting also discussed the matter of non-functional units of Pakistan Steel Mills and non-payment of gratuity and pensions to employees. The Committee called upon the relevant authorities to understand the problems faced by the pensioners and decided to summon Secretary Finance to the next meeting to discuss how to clear dues at the earliest.
