The long-awaited revival of Pakistan Steel Mills (PSM) has taken a major step forward as Pakistan and Russia have agreed to begin construction work in 2027. This development was shared with a parliamentary sub-committee during a recent meeting reviewing the Audit Report of the Ministry of Industries and Production for 2019–20. The announcement has renewed hope for the revival of one of Pakistan’s most important but long-idle industrial assets.
Pakistan Steel Mills, once the backbone of the country’s heavy industry, has remained non-operational for years due to financial losses, mismanagement, and outdated infrastructure. The new agreement with Russia signals a serious attempt to restore the steel complex and strengthen Pakistan’s industrial base.
Pakistan–Russia Cooperation on PSM Revival
Officials informed the committee that construction work on the Pakistan Steel Mills revival and expansion project will formally begin after the signing of the Engineering, Procurement, and Construction (EPC) contract with the Russian side. This EPC agreement is considered a critical requirement before any on-ground work can start.
The revival project is being handled under government-to-government cooperation, highlighting the strategic partnership between Pakistan and Russia. Both countries aim to modernize the steel plant using updated technology, efficient production systems, and improved management practices.
Progress Through Inter-Government Agreements
In November 2025, the Pakistan–Russia Inter-Government Commission signed a second protocol to advance the PSM revival plan. This protocol focused on finalizing technical details and preparing a bankable EPC agreement, which would allow construction and financing to move ahead smoothly.
The signing of this protocol marked an important milestone, as earlier discussions had stalled due to financing and feasibility concerns. With the new framework in place, both sides are now working to complete documentation and contractual obligations before the targeted 2027 start date.
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Technical Audit and Asset Valuation
As part of the revival process, a Russian firm conducted a detailed technical audit of Pakistan Steel Mills. The audit assessed the condition of machinery, infrastructure, and operational assets to determine what can be reused, upgraded, or replaced.
During this process, the Russian side requested an asset valuation, which Pakistani authorities confirmed currently stands at approximately $139 million. This valuation plays a key role in deciding investment size, project scope, and financial structuring. The audit is widely seen as a crucial step toward restarting operations at the steel complex.
Importance of Pakistan Steel Mills for the Economy
The revival of Pakistan Steel Mills is expected to have a positive impact on the national economy. Once operational, the plant could reduce Pakistan’s reliance on imported steel, support large infrastructure projects, and create thousands of direct and indirect jobs.
Steel is a vital input for construction, energy, transportation, and manufacturing sectors. Reviving PSM could help stabilize steel prices, improve supply chains, and strengthen Pakistan’s industrial self-reliance.
Challenges Ahead for the Revival Project
Despite the positive developments, challenges remain. These include ensuring timely completion of the EPC contract, securing sustainable financing, modernizing outdated systems, and maintaining transparency in project execution. Past failures of PSM have made stakeholders cautious, emphasizing the need for strong governance and long-term planning.
Experts also stress the importance of environmental compliance and energy efficiency in the revived steel plant to meet modern industrial standards.
A New Chapter for Pakistan Steel Mills
The agreement between Pakistan and Russia reflects renewed political will to revive Pakistan Steel Mills after years of stagnation. If implemented as planned, the 2027 construction start date could mark the beginning of a new chapter for Pakistan’s industrial sector.
The success of this project will depend on consistent policy support, effective collaboration with Russia, and strict oversight to ensure the mistakes of the past are not repeated.
Frequently Asked Questions (FAQs)
When will construction of Pakistan Steel Mills revival begin?
Construction work is expected to begin in 2027, after the EPC contract with Russia is signed.
Which country is partnering with Pakistan for PSM revival?
Russia is Pakistan’s key partner in the revival and expansion of Pakistan Steel Mills.
What is the current value of PSM assets?
The asset valuation of Pakistan Steel Mills is estimated at around $139 million.
Why was Pakistan Steel Mills shut down?
PSM faced years of financial losses, mismanagement, and outdated infrastructure, leading to its shutdown.
Why is the revival of PSM important?
Reviving PSM can reduce steel imports, create jobs, support infrastructure projects, and strengthen Pakistan’s economy.
