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What is Pakistan doing with their Type 59s when retired?

Interesting concept. @Philip the Arab. I think Pakistan should focus on modular heavy IVF's (30-40 ton) and MRAP vehicles. They can be dual use...for COIN in our western provinces or for conventional battles against Indian T-72/T-90's using modern ATGM's. With nuclear weapons...odds of big tank battles against India are low. Outside of the Sialkot - Jammu sectors....MBT's can not really be deployed in Kashmir.

Modifying older T59's is probably more cost effective route but I think Modifying the AL-Khalid...for a new production heavy IFV would be more technically effective.
 
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Few T59 have been fed to T80UD and Al Khalid as targets during military exercises. I believe T59 fleet have two futures, either those which are in good shape will receive 2nd life in shape of AZ upgrade, or they will end up in target practise after staying in reserves for a long time.

As far as transforming them in other roles is concerned, it's better to convert them into Anti Tank missile carrier vehicles by integrating them with modern long range 3rd Gen ATGM to supplement TOW equipped M113 in our heavy anti tank regiments. But again, the price estimations are rough guess. If there is little difference in prices of converting T59 into ATGM carrier and buying a dedicated one, then it's better to buy news one and perhaps our T59 will remain as they are.

I do wish to see them converted into heavy IFV with awesome looking Turret with 30mm chain gun, mounted ATGM, variety of optics and add on armor, but it's price will out class the advantages it will give on battlefield. Our armored Doctrine don't offers space for heavy IFV.

ATGM carrier is M-113 derivative:
1. M-901
2. Maaz - based on Talha

There is no heavy or light ; tracked ATGM carrier in PA. Light is wheels, heavy is tracked.
The future ATGM carrier could be a drone like Burraq.

PA has no standard IFV; two types like light of heavy IFV are even further. The potential IFV is based on Saad-APC, VIPER.

T-59 originally was inferior to soviet T-54/55 deployed by IA. It was upgraded over time with the most common being T-59 M2 or T-59 II. Non upgraded ones could have been used as targets for PA 125mm Sabot and HEAT rounds.

Any MBT or IFV, which directly combats enemy, has to be upgraded in protection and firepower to the maximum. M-113 are thin battle taxis, stay behind MBT's, dismount troops and go back to assembly area. Now T-59 if has to directly combat enemy, which it will in war, needs to be protected in best possible manner. Upgrading it will be expensive. Even converting it into an IFV would be expensive since it would need sensors, IBMS, armor, electronics, turret Etc to survive direct combat. It would drink more fuel than M-113 and offer less firepower than an MBT.

Then comes AZ, upgrade of T-59. Its engine is smaller, there are limitations in T-54 design. modern MBT designs are larger. It's the AZ's 125mm gun and after that it's protection that pits it easily against T-72 and then against T-90 or Arjun.
Instead of upgrading remaining T-59 to AZ, the money can be spent on a new MBT like AK series because AZ at the end of the day is a stop gap too, its upgraded to it max. PA needs MBT's of newer generation, like AK-I or AK-II. Engine wise, higher HP MBT's are required in desert to cover long distances quickly. T-59 is slow, AZ is a bit faster.

PA Is behind on MBT acquisition, T-59 had to be replaced by AK. T-59 is keeping many PA armour regiments active. Replacing MBT's has become difficult due to low AK production and longer hectic trials with VT-4 and T-84.

IFV offers 25-30 mm cannon and ATGM. MBT offers 105mm gun.
Even for FC, 100mm gun of T-69 is considered good enough. Giving T-59 with 105mm to FC could be looked at. Or just sell them.
 
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