Pakistan and Russia have agreed to begin the construction phase of the Pakistan Steel Mills (PSM) revision and expansion project in 2027, a parliamentary panel was informed on Thursday.

The update was shared during a meeting of a sub-committee of the Public Accounts Committee, convened by Dr Tariq Fazal Chaudhry, which reviewed the Ministry of Industries and Production’s Audit Report for 2019–20.

Briefing the committee, Secretary Industries Saif Anjum said physical work on Pakistan Steel Mills will commence following the signing of the Engineering, Procurement and Construction (EPC) contract with the Russian side.

He noted that in November 2025, the Pakistan–Russia Inter-Government Commission (IGC) signed a second protocol aimed at reviving PSM, under which both sides agreed to prepare a bankable EPC contract to move the project forward.

As part of the technical assessment, Russian firm Industrial Engineering LLC conducted an audit of the steel mill and requested an asset valuation. According to the secretary, the current valuation of PSM stands at approximately $139 million.

The audit also highlighted an irregular payment of Rs148.5 million related to an award by an international court in the Al-Tuwairqi Steel case. Committee members questioned the delay in filing a recovery case in local courts.

Responding to the query, the secretary explained that Al-Tuwairqi Steel had initiated proceedings against Pakistan at an international forum over the government’s failure to supply gas at a concessional rate. He added that Pakistan ultimately prevailed in the case and is entitled to recover Rs148.5 million.

Addressing the delay in pursuing the matter domestically, the secretary said the case was not initially followed due to diplomatic considerations. However, he added that the prime minister has since constituted a committee, which has recommended filing a case in the Sindh High Court to challenge the execution of the international award.

The committee was also informed that the owner of the steel facility has already divested a 95% stake in the company. Under regulations of the Securities and Exchange Commission of Pakistan (SECP), the remaining 5% stake cannot be sold.

Furthermore, the government retains the authority to confiscate the remaining shares if the owner fails to fulfil outstanding payment obligations, the secretary added.