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PSMC opposed PSM management about letter to NEPRA

  • SG Condemns the formation of subsidiary company by showing low value of assets of PSM, transfer of power generation license and Jetty rights.
  • SG requests the SECP, NEPRA, PQA not to be a party in illegal activities, demands for action from National Accountability Agencies.

Karachi, October 23, 2021: The Pakistan Steel Mills Corporation-Stakeholders Group (PSMC-SG) has vehemently opposed the letters written to NEPRA by the PSM management and the illegally appointed company secretary requesting the transfer of PSMC’s Electric power generation license to a newly formed subsidiary company Steel Corp Private Limited. It should be noted that PSM Power Generation Plant (TPP-TBS) like other production units has been closed since 2015 and PSM is purchasing electricity on industrial tariff from K-Electric to meet the electricity needs of the steel plant and its residential colonies.

In a statement, PSMC Stakeholders Group said that PSM has three power generators of 55 MW each which use coke oven and blast furnace gases as fuel to meet its energy needs. Two of these were kept operational at the same time, while one was on standby as per norms. However, due to lack of effective maintenance, their power generation capacity was at a much lower level than originally designed and now due to the incompetence of the present management, a large number of their parts, copper cables, bus bars, and transformers, etc. of the related distribution network have been stolen or damaged.

In the past when the plant was in operation, the management, which was incompetent and did not protect the interests of the steel mills, entered into an agreement with K-Electric (formerly KESC) under which the steel mills purchased power from KESC at higher rates and the excess electricity generated from TPP-TBS was sold to the KESC grid at relatively lower prices, costing the steel mills millions of rupees’ losses every year.

Even now, the incompetent management is purchasing electricity from K-Electric on industrial tariff and supplying it to its residential colonies at the domestic tariff, which is costing losses of millions of rupees to the steel mills but the ignorant administration has so far failed to reach an agreement with K-Electric on supply and distribution of electricity at domestic tariffs for Steel Town and residential colonies. On the other hand, the same self-interested management is now in the process of transferring PSM’s Power Generation License to the illegally established Steel Corp Pvt Ltd under the pressure of the Privatization Commission.

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According to the Stakeholders Group, all these issues whether it is the establishment of a Steel Corp subsidiary company or a deal for compromising other interests of the PSMC, such as the transfer of power generation license, the transfer of use and rights of the jetty, etc., not only the current CEO Brigadier (retd) Shuja Hassan Khorazmi is involved in all these matters, whose appointment has also been declared illegal and against the rules by the office of the Auditor General of Pakistan but this also includes the current corporate secretary Muhammad Shafiq Anjum, who reached the age of 60 and was re-appointed on an illegal contract after retirement and who use to surrender without fear of any accountability for any illegal act contrary to the rules and regulations as he has the patronage of Chairman Board Mr. Amir Mumtaz.

The Stakeholders Group demands that these illegal appointees, including the current CEO and company secretary, should be immediately removed from their positions as they are compromising the interests of PSMC against the benefits granted to the prospective bidder of majority stakes of Steel Corp private limited. In addition, the process of transfer of undervalued assets of Steel Mills, Power Generation License and rights of Jetty, etc. to Steel Corp Pvt Ltd should be stopped immediately. In this regard, the Security and Exchange Commission of Pakistan, NEPRA, and Port Qasim Authority should play their impartial role and the national accounting bodies should make accountability of those responsible for the ongoing damages to Pakistan Steel Mills Corporation.

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