Closed Pakistan Steel Mills incurs Rs79bn loss to national exchequer in 3 years

ISLAMABAD: The closed Pakistan Steel Mills (PSM) incurred losses of Rs79.3 billion over the past three fiscal years, with interest expenses accounting for Rs57.4 billion, according to official data.

The Ministry of Industries’ statistics showed that PSM recorded a loss of Rs24 billion in fiscal year 2025-26, despite the mill remaining non-operational since June 2015.

Interest costs accounted for around 72 per cent of the total losses during the three-year period. In FY2025-26, the mill paid billion in interest, including Rs11.8 billion on government loans and Rs5.2 billion on commercial bank loans.

The Central Monitoring Unit (CMU), which monitors state-owned enterprises, had recommended restructuring PSM’s debt, including debt-to-equity swaps and negotiated write-downs. It also proposed moving legacy liabilities into a holding company.

According to the CMU, PSM’s cash development loan stood at Rs108 billion in FY2024-25, while bank loans exceeded Rs40 billion.

Despite the mill being closed, Rs3.9 billion was spent on employee salaries over the past three years. Another Rs9.1 billion was spent on fuel, electricity, water and gas during the period.

The CMU said PSM’s obsolete technology, lack of modernisation and absence of production capacity had left it uncompetitive. It recommended exploring joint ventures with global steel manufacturers to attract investment and technical expertise.