ISLAMABAD: Pakistan and Russia have formally targeted 2027 as thecommencement year for the construction phase of the Pakistan Steel Mills(PSM) revision and expansion initiative, a development disclosed during arecent session of a key parliamentary oversight body. This milestonefollows sustained diplomatic and technical engagements between the twonations aimed at resurrecting the once-pivotal industrial facility inKarachi, which has remained non-operational for over a decade. Theannouncement underscores growing bilateral cooperation in heavy industryand signals potential relief for Pakistan’s steel sector dependency onimports.
The disclosure came before the Public Accounts Committee’s sub-committee,convened by Dr Tariq Fazal Chaudhry, while scrutinising the Ministry ofIndustries and Production’s Audit Report for 2019-20. Secretary IndustriesSaif Anjum provided a comprehensive briefing on the project’s currenttrajectory, emphasising that actual on-ground construction activities wouldcommence only after the finalisation and signing of the Engineering,Procurement and Construction (EPC) contract with the Russian partner. Thisconditional timeline reflects a structured, phased approach to ensurefinancial and technical viability.
Historically, Pakistan Steel Mills, established in the 1970s with Sovietassistance, represented a cornerstone of national industrialisationefforts, boasting an original capacity of over one million tonnes annually.Operations halted progressively from 2015 onward due to accumulated losses,mismanagement allegations, circular debt burdens and operationalinefficiencies, leading to a near-total shutdown. The prolonged closure hasexacerbated Pakistan’s reliance on imported steel products, strainingforeign exchange reserves and inflating construction and manufacturingcosts domestically.
Recent progress traces back to renewed Pakistan-Russia engagements underthe Inter-Government Commission (IGC) framework. In July 2025, the initialprotocol was signed between PSM and Russia’s Industrial EngineeringCompany, laying groundwork for collaboration. This was followed by a secondprotocol in November 2025, which committed both sides to drafting abankable EPC contract. Such agreements typically encompass detailedengineering designs, equipment procurement, civil works execution andperformance guarantees, forming the backbone of large-scale industrialrevivals.
The 2027 construction target aligns with preparatory timelines, includingcompletion of feasibility studies, finalisation of financing modalities andregulatory approvals. Russian involvement is anticipated to includetechnical expertise and possibly concessional funding, drawing onhistorical precedents of cooperation in energy and infrastructure sectors.For Pakistan, successful revival promises enhanced domestic steelproduction capacity, job creation for thousands and reduced import billsestimated in billions of dollars annually.
Experts note that the project’s success hinges on several factors,including transparent contract execution, avoidance of past governancepitfalls and integration with broader economic strategies. The allocationof approximately 700 acres of PSM land for potential new mill setups orrevival works, in coordination with provincial authorities, furtherillustrates governmental commitment to revitalising the site. Paralleldiscussions on establishing an Export Processing Zone at the PSM premisesaim to attract additional industrial investments.
Read Top Stories
The revival initiative also carries strategic implications amid shiftingglobal supply chains and regional geopolitical dynamics. Strengthening tieswith Russia in industrial domains complements Pakistan’s multi-alignedforeign policy, while addressing critical infrastructure gaps. Industrystakeholders have welcomed the timeline as a concrete step forward, thoughthey caution that delays in EPC finalisation could push milestones beyond2027.
Parliamentary scrutiny during the session highlighted accountabilitymechanisms, with committee members seeking assurances on audit observationsfrom earlier years. The briefing underscored ongoing efforts to resolvelegacy issues, including employee welfare and asset preservation, ahead offull-scale reactivation. Overall, the targeted 2027 start date representsoptimism tempered by pragmatic sequencing in one of Pakistan’slongest-running industrial rehabilitation endeavours.
Source: https://www.brecorder.com/news/40403642
ogimageimage-name
