Rs120m monthly income expected: PSM management plans to rent out 4,200 houses at Steel Town

ISLAMABAD: The management of Pakistan Steel Mill (PSM) is considering renting out 4,200 housing units at Steel Town Karachi, with an expected monthly rent of Rs120 million or Rs1.44 billion per annum, officials said.

According to officials at the Ministry of Industries and Production, around 4,200 housing units are vacant, and the ministry plans to rent out these houses to citizens. The officials added that Steel Town, Karachi, is equipped with all the civic facilities, including electricity, gas, telephones, water supply, and sewerage, as well as good quality roads and paved streets with street lights.

The officials said that educational institutions operated by PSM were handed over to Akhuwat Foundation at a monthly rent of Rs1.2 million, adding that the Foundation has asked the PSM management to rent out three more blocks to the Foundation with an estimated rent of Rs750,000.

PSM’s cumulative loss reaches Rs600bn, it pays Rs20bn annual interest: chairman

During the past two years, as a result of vigilance and the best management practices, the PSM management has caused no financial losses to the national kitty, hence saving billions of rupees.

A total of Rs6.18 billion was saved, of which Rs2.55 billion was saved on account of gas, Rs1.8 billion on account of electricity, Rs1 billion on account of recoveries from defaulters, Rs499 million on account of payroll, and Rs380 million was saved on account of water supply.

Moreover, the PSM management is in close contact with the government of Sindh on account of dealing with the educational institutions as well as recovering outstanding dues from the defaulters.

The official said that the PSM has to recover hundreds of millions of rupees from defaulters on account of gas bills, electricity charges, water supply, and house rents.

According to the officials, the government has no intention to run the affairs of the PSM as it has created a mess. However, the government is committed to fully facilitating local and international steel companies to revive and run the Mills.

Within the next few weeks, the Ministry of Industry and Production will officially issue an expression of interest for the privatization of the entity after it has prepared a bankable feasibility study.

The officials further stated that, at Pakistan’s request, Russia worked out two options for the revival of the PSM, one based on blast furnace model with an estimated cost of USD 1.91 billion, and the other based on Electric Arc Furnace (EAF) technology costing USD 1.05 billion.

They said the first option in monetary terms is expensive, while after the completion worldwide, it has proven more economical, as compared to the EAF model.

According to the official, Pakistan has received the proposals from Russian sides which have been forwarded to the Ministry of Industries and Production, saying that revival of the current mill on blast furnace model will be a one-time cost USD 1.91 billion, while constructing a new mill based on Electric Arc Furnace (EAF) technology will cost USD 1 billion, for which scrap will be imported.

As per the officials cost of constructing a new mill based on EAF technology is almost half lower than that of the revival of the mill based on the blast furnace model, but in the long run, the first method will prove to be cost-effective as compared with the EAF model, which is totally based on imported scrap.

In the blast furnace model, Pakistan can use locally available iron ore for steel production, while the alternative model is totally dependent on imported steel scraps.

Copyright Business Recorder, 2025