Pakistan Panel Approves Firing 9,000 Workers Before Mill Revival
(Bloomberg) -- Pakistan will terminate the services of as many as 9,000 workers at the nation’s biggest steel mill to plug a drain on resources in the midst of the coronavirus pandemic.
A ministerial panel of Prime Minister Imran Khan’s government approved the decision to fire workers of Pakistan Steel Mills Corp., according to a statement from the premier’s office. The workers will be dismissed in two phases after their dues totaling about 20 billion rupees ($122 million) are cleared, Hammad Azhar, minister for industries and production, said earlier.
Trimming the workforce will help the government check expenses at the loss-making state-owned enterprise at a time when the administration is pledging resources to fight the coronavirus pandemic. Khan has so far announced 1.2 trillion rupees of stimulus measures, while seeking external loans to bridge a budget gap that’s forecast to touch 9.6% of gross domestic product.
The government spends 700 million rupees monthly to meet expenses of Pakistan Steel, established in 1973 with help from the then Soviet Union. The company’s mills have been shut since 2015 and total losses stand at 230 billion rupees, Azhar said, adding the government plans to bring in private investors to run the company.
The government’s strategy is seen as one of the best options as the mill’s current expenses are unsustainable, said Mohammed Sohail, chief executive officer at Topline Securities Pakistan Ltd. in Karachi.
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