Pakistan and Russia to Begin Pakistan Steel Mills Revival Project in 2027 Following EPC Agreement

Pakistan and Russia have reached an agreement to commence the revival and expansion of Pakistan Steel Mills (PSM) in 2027, marking a significant step toward restoring one of Pakistan’s largest industrial assets. This development was shared with a parliamentary sub-committee that was reviewing the Ministry of Industries and Production’s Audit Report for 2019–20, highlighting the government’s focus on revitalizing the long-idle steel complex to boost domestic production and economic growth.

Officials informed the committee that the formal construction work will begin following the signing of the Engineering, Procurement, and Construction (EPC) contract with the Russian side, which will outline detailed responsibilities, timelines, and technical specifications for the project. The agreement between the two countries is part of a broader strategy under the Pakistan–Russia Inter-Government Commission, which in November 2025 signed a second protocol aimed at moving the PSM revival plan forward and preparing a fully bankable EPC agreement to attract investment and ensure financial feasibility.

As part of the preparatory phase, a Russian firm conducted an extensive technical audit of PSM to assess the condition of existing machinery, infrastructure, and operational systems. The audit also included an asset valuation exercise, which has placed the current value of the steel mill at approximately $139 million. This valuation and technical assessment are crucial for planning modernization, procurement of new equipment, and optimizing the production process once operations resume.

Authorities emphasized that the revival project is expected to generate employment, enhance local steel production capacity, reduce import dependence, and contribute to industrial growth in the country. Restarting PSM after years of dormancy is viewed as a strategic move to strengthen Pakistan’s industrial base, support downstream industries, and improve overall economic stability. The collaboration with Russia ensures access to technical expertise, investment support, and project management experience required for successfully modernizing the steel complex and achieving long-term operational sustainability.