The Ministry of Industries and Production has informed a parliamentary standing committee that a team of Russian technical experts is currently evaluating the feasibility of reviving Pakistan Steel Mills (PSM), with a final decision expected by June 30, 2025. This update came during a session on Thursday, where officials discussed the state of PSM and the potential for its revival through collaboration with Russia.
Russian Experts Assess PSM’s Revival Potential
According to ministry officials, a team of Russian experts recently visited Pakistan and also conducted virtual meetings to assess the current state of PSM and explore possible restructuring plans. The Russian team is working on evaluating various aspects of the steel mill, including its operations, financial health, and potential for recovery. Their detailed report, which was due on January 31 (today), is expected to provide a roadmap for the next steps.
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Despite the ongoing challenges, including PSM’s mounting debt of Rs345 billion, discussions with Russia are progressing positively. Officials remain optimistic that the revival of the mill is still a viable option, rather than opting for its closure. “Efforts are being made to revive the mill instead of scrapping it,” stated Syed Hafeezuddin, Chairman of the National Assembly’s Standing Committee on Industries and Production, during the committee’s review of the matter.
Long-Term Shutdown and Operational Challenges
PSM has been non-operational since 2015 due to inefficiencies, and its operations have been severely hindered by outdated technology, financial mismanagement, and poor governance. Despite this, ministry officials believe that working with Russia could provide the necessary expertise and financial support to revitalize the mill and make it profitable once again.
In addition to the mounting debts, concerns over the mill’s ability to operate in the future have been raised within the standing committee. The committee requested a detailed financial report on the current state of PSM, as they voiced serious concerns about its liabilities, inefficiencies, and the lack of a clear operational plan. The committee also urged the ministry to ensure that any revival plan must be sustainable and take into account the significant financial challenges.
Karachi’s Industrial Decline
During the meeting, Chairman Hafeezuddin expressed frustration over the role of K-Electric, the electricity distributor in Karachi, in the decline of the city’s industrial sector. The committee stressed that K-Electric should assume direct control over the power distribution network and collect payments from the public directly, instead of relying on PSM, which has been financially unstable.
“K-Electric is responsible for the destruction of Karachi’s industry,” Hafeezuddin remarked, highlighting the negative impact that the power distribution company has had on the operations of industries in the region, including PSM.
The committee’s concerns stem from the inability of PSM to meet its financial obligations, which has been compounded by its reliance on K-Electric for power supply. As a result, industries in Karachi have struggled with high energy costs and unreliable service, which has further hindered the growth of the local economy.
Hope for Revitalization
Despite the significant obstacles facing PSM, there is cautious optimism that a collaboration with Russia could help turn the situation around. The Russian team is expected to present its final report by the end of this week, which will detail its findings and provide recommendations on how to move forward with the revival plan.
The Ministry of Industries and Production has emphasized that while the mill has faced a long period of inactivity, it is not too late for a revival. With Russia’s expertise, there is potential to not only restructure PSM but also make it a more competitive and sustainable operation.
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The final decision on PSM’s future will be made by June 30, 2025, with the expectation that the Russian team’s report will offer a clear path for the revival process. If the plan moves forward, it could have a significant impact on the steel industry in Pakistan and potentially lead to the creation of thousands of jobs, contributing to the economic recovery of Karachi and the country as a whole.