IMO the PA has a new rifle in mind. It just hasn't signed onto a full-scale program yet because, as you said, shortage of funds and other priorities. However, I think it'll happen and, as
@Zarvan has wished, will probably involve Turkish OEMs. Of the suppliers available, the Turkish ones are probably able to offer the best bang for the buck.
That said, I don't think POF will manufacture these new rifles.
With our shortage of funds, it's probably untenable to buy licensing and facilities off-the-shelf; this time around, we'll likely see offset-based deals wherein the foreign OEMs set up shop in Pakistan, source Pakistani labor and inputs, and supply to the armed forces directly.
This might be the best course of action for us in the long run. It removes the armed forces from the defence industry business and, potentially, makes it easier for the Pakistani private sector to get involved (by eliminating the red tape and black tape). It's time for the military to become leaner in the sense that it should focus specifically on fighting and, in turn, leave the industry side to the private sector or at least independently-run state-owned enterprises.
TLDR: With an offset policy, the Army wouldn't need to pay for the local production line. Rather, it says it'll buy 1M rifles over 10 years, and sets a sourcing policy, e.g., built with 100% Pakistani inputs. In response, the OEMs invest in Pakistan (to set up their production lines and follow the sourcing policy) and, basically, supply the Army. In the end, the OEM owns the licensing, IP, etc, but through their Pakistani subsidiary. That Pakistani subsidiary might even start re-exporting, thereby giving the OEM additional revenue, supporting Pakistani jobs, and helping us gain foreign currency (via corporate and income taxes).