Federal-Provincial Partnership Unveiled for Steel Sector Revival
The Ministry of Industries and Production has outlined a comprehensive joint federal-provincial strategy aimed at rebuilding Pakistan's steel production capacity, with specific confirmation of coordination with the Sindh government for the allocation of land to establish a new steel mill. This announcement came during a parliamentary session chaired by Deputy Speaker Syed Ghulam Mustafa Shah, which focused extensively on the critical issues surrounding Pakistan Steel Mills (PSM).
Detailed Parliamentary Briefing on PSM Status
The sitting commenced after a thirty-minute delay, following which a written reply from the Ministry of Industries and Production was formally tabled. This document provided exhaustive information on the current operational status and future strategic direction of Pakistan Steel Mills. According to the official reply, production operations at PSM have remained completely suspended since 2015, a prolonged shutdown that has fundamentally influenced subsequent policy decisions regarding restructuring, downsizing, and exploring alternative options for reviving the nation's steel production capabilities.
Land Allocation and International Protocols
The government informed the House that 700 acres of land belonging to Pakistan Steel Mills have been specifically allocated either for the establishment of a new steel mill or for targeted revival initiatives. This move is designed to create a viable and sustainable framework for future industrial activity within the steel sector. Efforts are actively underway to seek technical support from relevant institutions, with a clear focus on enhancing feasibility and ensuring long-term sustainability to make the steel sector more attractive for revival or fresh investment.
In a significant development, protocols have been formally signed between Pakistan Steel Mills and Russia's Industrial Engineering Company. The first protocol was inked on July 10, 2025, followed by a second agreement signed on November 26, 2025, marking important steps toward international collaboration for technical and operational support.
Policy Shift and Workforce Reductions
The House was further informed that in May 2024, the Special Investment Facilitation Council (SIFC) made a decisive policy shift by deciding that Pakistan Steel Mills would be scrapped. This decision came after years of uncertainty surrounding the financially troubled, loss-making enterprise. The ministry reiterated that, in close collaboration with the Sindh government, formal approval has been granted for the allocation of land for the establishment of a new steel mill, underscoring a coordinated federal-provincial effort to rebuild and modernize steel production capacity.
Regarding employment, the ministry disclosed that out of the original 8,021 employees of Pakistan Steel Mills, a substantial 7,709 have been laid off, with only 912 workers currently retained. This significant reduction has dramatically decreased the organisation's operational footprint and associated costs.
Financial Impact and Future Outlook
As a direct result of these workforce reductions and operational changes, the monthly salary burden has declined sharply from Rs360 million to Rs40 million. This reduction has substantially eased what the government described as a considerable financial strain on the national exchequer, allowing for more focused allocation of resources toward revival efforts. The coordinated approach between federal and provincial authorities signals a renewed commitment to revitalizing Pakistan's steel industry through strategic partnerships and efficient resource management.
