Russia Backs Pakistan’s Rusting Pride – And Sends A Message To India

Moscow has formally signed a new industrial cooperation agreement with Pakistan – a revival attempt of the long-defunct Pakistan Steel Mills (PSM) in Karachi.

The agreement was signed at the Pakistan embassy in Moscow. (Facebook/Pakistan Embassy Russia)

Moscow/New Delhi: In a move that is bound to stir concern in New Delhi, Russia has formally signed a new industrial cooperation agreement with Pakistan – a revival attempt of the long-defunct Pakistan Steel Mills (PSM) in Karachi. Described as a protocol of cooperation, the pact was signed at the Pakistani Embassy in Moscow and promises to restart and expand steel production at a facility that was once the pride of Soviet-Pakistani engineering.

This deal marks a new chapter in a forgotten story – one that began more than half a century ago. Back in 1971, it was the Soviet Union that helped lay the foundation of Pakistan’s largest industrial complex. Today, after decades of neglect, a trail of mounting losses and shifting political winds, Russia is circling back to finish what it once started.

“This revival, with Russia’s help, is more than a business deal. It reflects our shared industrial history and a future we want to build together,” said Pakistan Prime Minister’s Special Assistant Haroon Akhtar Khan during his Moscow visit.

According to Pakistan’s national news agency APP, the signing ceremony also reaffirmed the “long-standing industrial partnership” between the two nations. The objective is to bring the Karachi-based steel plant back to life and boost its output, possibly restoring thousands of lost jobs and reigniting a sector that has remained idle for far too long.

Also In The Race, But Left Behind

For months, China too was eyeing the same prize. When Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) government decided to restart the revival efforts in 2018, it first engaged a Chinese firm for negotiations. However, the talks hit a dead end. The Chinese bid faded, but the Russians, perhaps driven by nostalgia and ownership of the project’s origins, never stopped knocking.

Russia insisted it was the only logical choice to resuscitate the steel plant it once designed. The Kremlin saw itself not as an outsider but as a returning builder – one who knew the bones of the structure better than anyone else.

A Ruin Built From Decay And Delay

Once a symbol of industrial ambition, the PSM began its steep descent in 2008. Losses piled up after a slew of politically motivated hirings, combined with the blowback of the global financial crisis. By the end of the 2008-09 fiscal year, the plant had already sunk into a deficit of nearly 17 billion Pakistani rupees. That number ballooned over the next five years, touching 118.7 billion.

Even as successive governments, first under the Pakistan’s People’s Party and later the Pakistan Muslim League (Nawaz), watched the unit bleed. There was no coordinated effort to stop the rot.

President Pervez Musharraf’s regime had once seen the plant report profits of over 9.5 billion rupees in 2007-08. A decade later, by May 31, 2018, it had sunk to a terrifying 200 billion-rupee hole.

The PTI came with promises of revival. What followed was a silent bidding war between Russia and China for control of the broken machine. This new agreement finally puts Moscow in the driver’s seat.

The Express Tribune reports that Pakistan now hopes this Russian-backed turnaround will not only rescue an industrial dinosaur but also breathe new life into a crucial sector of its crippled economy.

Russia, too, appears eager to re-establish its economic footprint in South Asia, starting with steel, in a country once deeply aligned with the United States but now visibly drifting toward Moscow and Beijing.