Pakistan Steel Mills (PSM) is considering renting out around 4,200 vacant housing units in Steel Town, Karachi, a move expected to generate monthly rental income of about Rs120 million, or Rs1.44 billion annually, according to a news report.
Officials at the Ministry of Industries and Production said the housing units are fully equipped with civic facilities, including electricity, gas, water supply, sewerage, telephone connections and paved roads with street lighting. The ministry plans to offer the houses to the public as part of efforts to generate non-operational revenue.
Officials said educational institutions previously operated by PSM have already been handed over to the Akhuwat Foundation at a monthly rent of Rs1.2 million. The foundation has also requested the leasing of three additional blocks, with an estimated monthly rent of Rs750,000, which is currently under consideration.
The ministry said that over the past two years, improved oversight and cost-control measures have prevented additional losses to the national exchequer. As a result, total savings of Rs6.18 billion were recorded, including Rs2.55 billion on gas, Rs1.8 billion on electricity, Rs1 billion recovered from defaulters, Rs499 million in payroll savings and Rs380 million on water supply.
Despite these measures, officials said PSM continues to face cumulative losses of around Rs600 billion and annual interest payments of nearly Rs20 billion. The government has reiterated that it does not intend to resume operations under state management.
Officials said the Ministry of Industries and Production will issue an expression of interest for privatisation within the next few weeks after completion of a bankable feasibility study. The government plans to facilitate local and international steel companies interested in reviving and operating the mill.
At Pakistan’s request, Russia has proposed two technical options for revival. One involves restarting the existing mill using a blast furnace model at an estimated cost of $1.91 billion.
The second option involves setting up a new mill based on Electric Arc Furnace (EAF) technology at an estimated cost of $1.05 billion, which would rely on imported steel scrap.