ISLAMABAD: The government has decided to move towards revival of Pakistan Steel Mills (PSM), effectively reversing its earlier decision to liquidate the state-owned enterprise, as some international parties have shown keen interest in reviving the dormant steel giant, well-informed sources told Business Recorder.
The development comes after the government initiated consultations with Russian company Industrial Engineering LLC for revival, modernisation and restructuring of PSM.
According to sources, two protocols have already been signed between Industrial Engineering LLC of Russia and PSM under the Ministry of Industries and Production.
READ MORE: Suggestions soon to revive PSM: Leghari
The first protocol, signed in Moscow on July 10, 2025, covers cooperation for revival, modernisation and restructuring of PSM, while the second protocol, signed during the 10th session of the Pakistan-Russia Intergovernmental Commission on November 26, 2025, focuses on determining operational and capital expenditure requirements for manufacturing.
Sources said an exercise to determine production costs and assess market feasibility was also undertaken, with the findings to form the basis for a final decision regarding revival of the mill.
According to sources, the concerned authority will submit its recommendations to the Cabinet Committee on SOEs to stop liquidation of PSM on the hopes that the entity will be revived with the support of international investors.
The Special Investment Facilitation Council (SIFC), in May 2024, had decided to scrap PSM, while the Cabinet Committee on Rightsizing subsequently approved liquidation of the existing mill in August 2024.
“However, the government has now decided to move towards revival of the mill,” he said, adding that a formal summary in this regard had been submitted to the Ministry of Industries and Production for consideration.
Responding to a supplementary question, the parliamentary secretary said the policy direction was now clear and the government intended to restore PSM to operational status.
He added that the timeline agreed with the Russian company would be followed and further steps would be taken accordingly.
Meanwhile, Minister for Power Sardar Awais Leghari has said a set of recommendations for reviving the country’s dormant steel giant would soon be submitted to policymakers, signalling renewed efforts to breathe new life into one of Pakistan’s largest industrial projects.
Addressing a webinar titled “Pakistan-Russia: Strengthening Trade, Education and Energy Collaboration,” jointly organised by the University of World Civilizations Moscow (UWCM) and the Institute of Regional Studies (IRS), the minister said Pakistan-Russia relations had gained positive momentum over the past two decades, driven by mutual trust, respect and a shared commitment to regional stability.
Previously, the government had decided to scrap the entity as it found no buyer of PSM in the market. Since then the government is paying the salaries of remaining employees whereas its bills are being paid from the sale of scrap.
Copyright Business Recorder, 2026