ISLAMABAD:
The closed Pakistan Steel Mills (PSM) cumulatively caused a whopping loss of over Rs79 billion in the past three fiscal years, of which Rs57.5 billion was booked in interest expenses, as the finance ministry ignored advice to restructure the debt of the closed unit.
According to statistics provided by the Ministry of Industries, a loss of Rs24 billion was booked in the last fiscal year 2025-26 alone, despite the fact that the factory had been shut down by the government of Pakistan Muslim League-Nawaz in June 2015.
Details revealed that employees were still getting salaries; there were also expenses on fuel, electricity, water and gas and above all, the government was paying a huge interest on past loans.
From fiscal year 2023-24 to fiscal year 2025-26, the PSM caused Rs79.3 billion losses, which was the period when Shehbaz Sharif was the prime minister, except for a brief period of eight months for the caretaker setup, according to the official statistics.
Out of these losses, Rs57.4 billion, or 72%, was because of interest costs of past loans. The statistics further disclosed that the annual cost on interest payments was Rs17.7 billion in the last fiscal year, which was about Rs1.3 billion less than the preceding year due to low interest rates.
Out of the Rs17.7 billion, Rs11.8 billion was paid in interest on the government loan. Another Rs5.2 billion was paid as interest cost on commercial banks’ loans.
In the Review TV programme – Pakistan’s only prime time show on the economy – it had been highlighted that in the first half of the last fiscal year, the closed mill caused a loss of nearly Rs13 billion.
More alarming was that the federal government did not restructure the PSM debt, which was mainly in the shape of a cash development loan by the finance ministry and the National Bank of Pakistan. The finance ministry ignored the advice of its own Central Monitoring Unit (CMU), which traces the progress of state-owned companies.
