Closed Pakistan Steel Mills Costs Rs79.3bn in Three Years
ISLAMABAD, PAKISTAN — WEB DESK: The closed Pakistan Steel Mills (PSM) accumulated Rs79.3 billion in losses over the past three fiscal years, with interest payments on legacy loans accounting for nearly three-quarters of the financial burden, according to official statistics cited by The Express Tribune.
Data provided by the Ministry of Industries showed that PSM recorded a Rs24 billion loss in fiscal year 2025-26 alone, even though the steel plant has remained shut since June 2015.
Of the Rs79.3 billion accumulated over fiscal years 2023-24 to 2025-26, approximately Rs57.4 billion, or 72%, was attributed to interest costs on previous loans. Interest expenses stood at Rs17.7 billion in the latest fiscal year, down about Rs1.3 billion from the preceding year as interest rates declined.
Of that annual interest bill, Rs11.8 billion was linked to government loans and another Rs5.2 billion to commercial bank borrowing. The report said PSM’s cash development loan stood at Rs108 billion as of FY2024-25, while bank loans exceeded Rs40 billion.
The financial burden extends beyond debt servicing. Ministry statistics showed that Rs3.9 billion was spent on employee salaries during the three-year period, while another Rs9.1 billion went towards fuel, electricity, water and gas expenses, despite the mill remaining non-operational.
The government’s Central Monitoring Unit (CMU), which monitors state-owned enterprises, had recommended restructuring PSM’s debt through measures including debt-to-equity swaps and negotiated write-downs. According to the Tribune report, those recommendations were not implemented.
The CMU also identified ageing technology, accumulated liabilities and the absence of modernisation as major problems. It recommended a government-led debt clean-up and suggested that liabilities could be transferred to a holding company.
The monitoring unit further suggested that joint ventures with international steel manufacturers could potentially bring foreign investment, technical expertise and export-market access.
The figures underscore the continuing fiscal burden associated with PSM: although production has remained halted for more than a decade, debt servicing, salaries and utility-related expenses continue to generate costs for the state.
