Cabinet Committee of Restructuring meets for Restructuring of Pakistan Steel Mills and Pakistan Railways

Islamabad: A meeting of Cabinet Committee of Restructuring (CCOR) held here today under the Chairmanship of Federal Minister for Finance and Economic Affairs Dr. Abdul Hafeez Shaikh to discuss various recommendations and improvements for working of Pakistan Steel Mills (PSM) and Pakistan Railways.

A comprehensive presentation made by PSM’s official’s informed CCOR that Pakistan Steel remained a profitable organization from 2001 to 2008. 2008-2009 was an unusual year for Pakistan Steel due to many reasons mainly the global financial crisis.

The presentation highlighted that the current crisis in Pak Steel are happened due to the low capacity utilization, liquidity crisis, steep rises in international price of coal in 2008 and some governance issues.

CCOR discussed a Business Plan proposed by Pak Steel which includes injection of Rs 11 Billion with substantial restructuring of existing loans, implementation of CAPEX plan, rationalization of custom duty and empowerment of board of directors.

The CCOR informed that it acknowledged the urgency of the situation and told finance ministry to provide a bank guarantee of Rs.6 billion to ensure working capital for Pak Steel. CCOR also decided to work further on proposed business plan so that other context of PSM requirement could be fulfilled to ensure its long term viability.

The second agenda of meeting pertained to Pakistan Railways. A detailed plan to address the short term and medium term plan was deliberated in the meeting. The short term plan focuses on inducting locomotives to improve freight operation. While deliberating on the other proposals of Pakistan Railways, CCOR decided to provide Rs.600 millions to Pakistan railways to pay the WAPDA dues.

CCOR decided to increase the credit limit of Pakistan Railways from PSO and also decided to ensures subsidy to cover the bill of salaries and pension. CCOR also directed Pakistan Railways to utilize the funding from their PSDP allocations. CCOR also discussed the fast track appointments of CEO and CFO and early establishment of the board.

Federal Ministers for Railways, Federal Minister for Production, Secretary Finance, Secretary Railways, Secretary Production, Chairman Pakistan Steel Mills and other officials were present in the meeting

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