Closed Pakistan Steel Mill Accumulates Rs. 79.3 Billion in Losses Over 3 Years
Pakistan Steel Mills (PSM) accumulated losses of Rs. 79.3 billion over the past three fiscal years despite remaining closed since … Read More The post Closed Pakistan Steel Mill Accumulates Rs. 79.3 Billion in Losses Over 3 Years appeared first on ProPakistani .
Pakistan Steel Mills (PSM) incurred a staggering Rs. 79.3 billion in losses over the last three fiscal years, despite being idle since 2015. Interest payments on old loans accounted for nearly three-quarters of the financial strain. For the fiscal year 2025-26 alone, PSM reported a loss of Rs. 24 billion. Since its closure in June 2015, the mill has not operated.
From FY2023-24 to FY2025-26, interest expenses totaled Rs. 57.4 billion, or about 72 percent of PSM's total losses. Interest payments in FY2025-26 reached Rs. 17.7 billion, including Rs. 11.8 billion on government loans and Rs. 5.2 billion on commercial bank loans. The Central Monitoring Unit previously suggested restructuring PSM's debt, but this was not enacted.
The mill's cash development loan stood at Rs. 108 billion in FY2024-25, with an annual interest cost of approximately Rs. 11.5 billion. The unit also had over Rs. 40 billion in bank loans, primarily from the government-owned National Bank of Pakistan. The CMU emphasized the need for debt restructuring, such as debt-to-equity swaps and negotiated write-offs, to alleviate liabilities and enable strategic investment in PSM.
It further recommended separating liabilities into a separate holding company as part of a government-led debt cleanup. Despite its non-operational status, PSM continued to incur expenses, including Rs. 3.9 billion in salaries and Rs. 9.1 billion for fuel, electricity, water, and gas over the past three fiscal years. The CMU highlighted PSM's technological obsolescence, accumulated liabilities, and limited production capacity, which hindered its ability to compete with imported steel.
The monitoring unit suggested exploring joint ventures with global steel manufacturers to gain technical expertise, foreign investment, and market access. The unit warned that without changes in subsidy management, debt management, and operations, PSM and other trading state-owned enterprises would persistently burden the government financially.
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