Pakistan Steel Mills (PSM), despite being shut down since 2015, continues to incur significant financial losses, averaging Rs7.366 billion annually. Over the past five years, the state-owned enterprise has accumulated losses totaling Rs88.394 billion, recently reviewed documents.
During this period, PSM generated total revenue of Rs58.150 billion, while expenditures reached Rs146.544 billion, highlighting a substantial deficit. The mill, which operates under the Ministry of Industries and Production, has remained non-operational since its production activities ceased over a decade ago.
A senior official from the ministry, speaking anonymously, emphasized that these losses extend beyond internal financial concerns, representing a wider economic burden. This includes liabilities related to idle assets, ongoing salary and medical expenses for remaining staff, and the loss of industrial capacity.
The official urged the government to prioritize the revival or restructuring of PSM, citing its historical importance to Pakistan’s industrial sector.
Financial records for 2024 reveal that PSM earned Rs7.674 billion in revenue, comprising Rs0.915 billion from sales and Rs6.759 billion from other operating income, against expenditures of Rs35.216 billion. These expenses included Rs2.040 billion in financial costs, Rs7.449 billion in sales costs, Rs0.041 billion in distribution costs, Rs7.393 billion in administrative expenses, and Rs0.308 billion in other costs.
In 2023, the mill reported Rs5.649 billion in revenue, with Rs2.709 billion from sales and Rs2.940 billion from other income, while expenditures totaled Rs33.107 billion. Earlier years also showed similar trends, with Rs35.490 billion generated in 2022 and Rs7.132 billion in 2021, all overshadowed by high operating costs.
The documents further indicate a significant reduction in workforce, from 8,618 employees in 2020 to 396 regular workers as of June 2026. Despite this downsizing, PSM continues to bear employee-related expenses, including Rs0.12678 billion in medical costs between 2021 and 2025.
In 2020, the government approved a plan to terminate all 9,350 employees, estimating compensation between Rs18 billion and Rs19.7 billion. However, as of July 2026, the Economic Coordination Committee questioned the continuation of salary payments and requested details on revenue sources and future plans. The Industries Ministry reported that 7,892 employees had been retrenched, with 729 still employed at that time. The workforce has since been further reduced, with some employees shifted to daily wages or removed entirely.
Efforts to resolve PSM’s future are underway. The Ministry of Industries’ Public Relations Officer stated that technical issues delaying progress have nearly been resolved. He confirmed that many employees have been transitioned to daily wages or laid off in line with government policy, with all remaining staff expected to be released once matters concerning PSM and its assets are finalized.
Interest in PSM’s land and assets has emerged from three companies based in China, Russia, and Singapore. Negotiations are ongoing to finalize these potential takeovers, reflecting the government’s intent to address the long-standing challenges surrounding PSM’s extensive holdings, liabilities, and workforce.
Financially, PSM’s debt remains a significant obstacle. The Finance Division’s Central Monitoring Unit has recommended restructuring the mill’s debt through measures such as debt-to-equity swaps and negotiated write-downs, noting that current liabilities hinder attracting strategic investment. The mill’s cash development loan stood at Rs108 billion in 2024-25, with bank loans exceeding Rs40 billion.
PSM’s closure in June 2015 followed years of operational and financial difficulties. Despite ceasing production, the government continued to incur costs related to salaries, utilities, debt servicing, and maintenance. The 2020 workforce rationalization plan aimed to terminate all employees with compensation, acknowledging that repeated bailout attempts since 2008-09 had failed to restore operations.
A 2023 government review reassessed PSM’s assets, liabilities, human resources, and other factors after the mill was removed from the privatization list. Successive governments have explored revival and restructuring options, including a 2025 agreement with Russia to modernize and expand the mill. In early 2026, the government announced a revival plan involving foreign investment, with five companies expressing interest and a strategic roadmap developed.
Concerns have also been raised about the use of PSM’s vast land. Stakeholders have called for deferring plans to allocate part of the land for a special economic zone until a clear decision is made regarding the mill’s future. They emphasize the need for thorough due diligence on assets, liabilities, inventories, and land records before finalizing any course of action.
Security and asset management have become pressing issues during the prolonged closure. A Senate subcommittee recently highlighted repeated thefts, insufficient security personnel, and encroachments on PSM land. The Defence Security Force, which had been assisting with security, was scheduled to withdraw by the end of September 2026. Following reports of theft involving 36 tonnes of material, a parliamentary panel ordered PSM management to enhance security measures and submit an updated audit report.
The ministry official reiterated the urgency for the government to make a definitive decision on PSM’s future, stressing that the closure has already been decided and that addressing ongoing liabilities is crucial to easing the economic burden on the country.
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