Pakistan Steel Mills Losses Surge To Rs. 245.9 Billion: Audit

Pakistan Steel Mills Corporation Limited has accumulated losses of Rs. 245.9 billion after more than a decade of financial deterioration, with the Auditor General of Pakistan attributing the decline to weak governance, poor financial management, and years of operational inactivity.

According to the latest audit report, the state-owned steel producer’s accumulated losses increased by more than 1,355 percent from Rs. 16.9 billion in the fiscal years 2008 and 2009 to Rs. 245.9 billion by the fiscal year 2023 and 2024. The audit also highlighted the failure to finalize financial statements for the fiscal years 2023 and 2024 and 2024 and 2025, raising concerns over financial transparency and accountability.

The audit identified several governance and administrative shortcomings, including the improper recording of equity worth Rs. 11 billion, outdated ownership records for 1,675 acres of land, and the appointment of an executive in violation of the State Owned Enterprises Act. It also found that finished steel inventory worth Rs. 17.6 billion has remained unsold since operations ceased in 2015.

The report said the corporation continues to face severe cash flow problems driven by unresolved theft, poor asset management, unauthorized occupation of 1,929 residential units, and annual losses of more than Rs. 1.1 billion due to discrepancies in water supply costs. \

Between the fiscal years 2008 and 2009 and 2023 and 2024, Pakistan Steel Mills posted an average annual net loss of Rs. 25.5 billion. The only reported profit came in the fiscal years 2021 and 2022 and resulted from an asset revaluation rather than business operations.

To keep the corporation afloat, the federal government provided loans totaling Rs. 106.2 billion between 2013 and 2025. The audit noted that finance costs climbed from Rs. 464 million in the fiscal years 2008 and 2009 to Rs. 20 billion in the fiscal years 2023 and 2024, while administrative expenses more than tripled over the same period.

Revenue also collapsed after the plant shut down in 2015, with income since then coming almost entirely from the sale of remaining inventory.

The report further showed that total liabilities rose to Rs. 358 billion by the fiscal years 2023 and 2024, while the company’s apparent increase in equity was largely the result of land revaluations rather than improved financial performance. Trade debts also increased sharply, adding further pressure to the corporation’s financial position.

The Auditor General recommended immediate restructuring of Pakistan Steel Mills, the appointment of a permanent chief executive officer, and the development of a comprehensive revival plan centered on public-private partnerships or asset leasing to prevent further losses and improve the company’s long-term financial sustainability.