Steel mourning: How Pakistan Steel Mills became Rs800bn liability

The Senate Standing Sub-Committee on Industries and Production, comprising Senator Syed Masroor Ahsan, Senator Syeda Khalida Ateeb

KARACHI: A Senate sub-committee’s recent visit to Pakistan Steel Mills (PSM) has raised fresh questions over the protection of the state-owned industrial giant, amid concerns about security shortages, alleged land encroachment, recurring theft and the absence of updated financial records.

The Senate Standing Sub-Committee on Industries and Production, comprising Senator Syed Masroor Ahsan, Senator Syeda Khalida Ateeb and Senator Danesh Kumar, reviewed the situation at PSM during its September 7 visit to the sprawling Karachi complex.

Officials briefed the committee that PSM currently has only around 190 security guards to protect its vast area, while personnel of the Defence Security Force assisting the mills are scheduled to withdraw by September 30. PSM management has sought a phased withdrawal, saying it needs time to strengthen its own security arrangements and make alternative provisions.

The security issue has assumed greater significance following repeated reports of theft from the facility. During the proceedings, lawmakers expressed concern that the problem appeared to extend beyond isolated incidents and required stronger institutional oversight, investigation and prosecution.

Senator Danesh Kumar questioned the low rate of convictions despite the arrest of hundreds of suspects in theft-related cases, stressing that effective investigation and prosecution were necessary to ensure that those responsible were held accountable.

Senator Syeda Khalida Ateeb also described the theft problem as a chronic and organised issue, arguing that simply arresting individuals would not resolve weaknesses within the system. She referred to a previous case involving the alleged theft of a gas valve transported by truck and questioned the lack of meaningful accountability.

The committee was also informed that around 290 acres of PSM land had been encroached upon, with three union councils reportedly established on the disputed area. The lawmakers expressed concern over the protection and management of the mill’s land and other assets.

Senator Syed Masroor Ahsan said the reported encroachment reflected serious shortcomings in departmental accountability and emphasised that PSM remained a national asset whose resources needed to be protected and utilised in the wider public interest.

The committee recommended that relevant Finance authorities facilitate PSM in recruiting the security personnel considered necessary to protect its assets. It also met representatives of the employees’ union and handed a questionnaire to the PSM management, seeking detailed responses for consideration at its next meeting.

Meanwhile, the PSMC Stakeholders Group, led by Convener Mumrez Khan, has submitted a separate appeal to the Senate sub-committee seeking a performance audit of the Ministry of Industries and Production as well as the PSM Board of Directors and chief executive.

The stakeholders group alleged that successive governments’ appointees had contributed to the deterioration of PSM between 2006 and 2026, claiming that the once-profit-generating organisation had been transformed from a national asset into a financial liability exceeding Rs800 billion.

The group has called for accountability over the factors that allegedly hindered privatisation efforts, contributed to accumulated losses and affected the protection and utilisation of PSM’s assets. These assertions remain allegations by the stakeholders group and require verification through official financial and audit records.

The stakeholders have also raised questions about the reported allocation of approximately 6,800 acres of PSM land to the Special Investment Facilitation Council (SIFC) for a Special Economic Zone under the 2026-27 budget. They have referred to previous Supreme Court proceedings concerning PSM assets and said their correspondence with relevant authorities has not received a response.

Another major concern emerging from the proceedings is the absence of comprehensive updated financial information. According to the material reviewed by Minute Mirror, audited accounts were available only up to June 2023, while financial information covering the period from July 2023 to August 2026 was not presented to the committee.

The record also contains references to earlier corruption-related proceedings, including Supreme Court and National Accountability Bureau matters. However, no documentation was presented to the committee showing that cases had subsequently been referred to FIA or NAB in a manner resulting in financial recovery, according to the information available for this report.

The shortage of manpower and outstanding employee dues were also among the issues placed before the parliamentary forum.

The Senate sub-committee has now directed PSM management to provide detailed replies to its questions. The stakeholders group has also offered to submit historical production and workforce data covering 1985 to 2026 to demonstrate what it says is the mills’ potential for revival.

The latest developments have reopened the long-running debate over the future of Pakistan Steel Mills, a vast industrial complex that once employed tens of thousands of workers and occupied around 19,000 acres in Karachi.

The central question now is whether the state will pursue a transparent investigation into the mills’ financial decline, land management and security failures before making further decisions about its future.

Minute Mirror has sought the positions of the Ministry of Industries and Production, the PSM Board of Directors and SIFC on the issues raised in this report. Their responses, if received, will be incorporated into subsequent coverage.