Islamabad:
The Government reaffirmed on Wednesday its decision to close the Public Losses Services Stores Corporation since the end of this month and constituted a panel to consider giving a gold -handed to 11,421 employees that can cost more than RS29 billion.
It was not clear if the government would give the compensation package to the 11,421 employees or limit it to 5,217 regular employees. The discussions took place during a meeting of a committee constituted by the Prime Minister to supervise the closure and privatization of the Public Service Store Corporation (USC).
The Minister of Finance, Muhammad Aurengzeb, presided over the meeting, attended by other cabinet members.
The Committee has had the task of guaranteeing a smooth and transparent closing process, formulating an adequate vssa for USC employees and recommending a structured timeline for privatization, said the Ministry of Finance.
The Ministry of Finance said that the Committee reviewed the progress made in the light of the assigned tasks and maintained detailed deliberations on the way to follow.
“It was reaffirmed that, according to government directives, all USC operations will be closed before July 31, 2025,” according to the Ministry of Finance. The Committee extensively discussed the formulation of a fairly viable voluntary separation scheme (VSS) for USC employees, he added.
Commercial entities such as USC fought with high liabilities, ineffective use of subsidies and operational inefficiencies, according to the SOES performance report that the Ministry of Finance published last week. He added that the dependence on delayed government subsidies creates a cash flow crisis, while the poor inventory management worsens tax risks
The report of the Ministry of Finance declared that the USC lost RS6.1 billion at the operational level during the July-December period of the last fiscal year and was plagued with financial costs, which adds to the load due to composite operational losses.
The USC model is promoted by subsidies instead of accumulated and accumulated losses in RS15.9 billion from December last year, according to the Ministry of Finance. He added that the balance revealed a weak equity of only RS1.8 billion, largely eclipsed by current RS50.7 billion liabilities, reflecting the risks of solvency and negative working capital.
According to official documents, there were a total of 11,421 employees of the USC, including 5,217 regular employees. The total cost of the gold -hands squeeze is estimated at RS29.2 billion, including RS22.8 billion for regular employees. However, these figures are not final and the cost of the compensation package will be determined by another committee.
The details showed that regular employees who have more than 20 years of association with the USC would obtain two basic operation payments of the full years, while those who have less than 20 years of experience will obtain three basic salaries of the full years or 125% of the basic payment of the remaining months, which is higher.
Regular employees will also obtain terminal quotas and house rentals.
There are 3,319 contractual employees who are proposed to receive two basic salaries of the full years as compensation, which will cost RS3.5 billion. Another 2,885 are the daily bets who are proposed to receive two salaries from the full years that will cost RS2.9 billion.
The entity has 21 properties and also faces an important problem of non -payments of promised subsidies of more than 50 billion by the Ministry of Finance.
The Brochure of the Ministry of Finance declared that during the course of the meeting, the members examined several dimensions of the proposed VSS, including its projected size, potential fiscal impact and legal and operational implications associated with its structure and deployment. The Committee recommended that the privatization commission on optimal structuring and viability of privatization or alternatively sales of assets linked to USC operations be consulted.
To facilitate an exhaustive analysis, the president constituted a subcommittee headed by the Secretary’s establishment division, the Ministry declared.
The Committee will include representatives of the Finance Division and the Division of Industries and Production to examine the legal and operational aspects, the contours, the size and structure of the proposed VSS and present its report to the main committee for the end of the week.
This will allow the Committee to consolidate its findings and finish its report and recommendations that will be presented to the online prime minister with the terms of reference, said the Ministry of Finance.
The SOE report stated that the great dependence of the USC in government subsidies and the decrease in sales highlighted systemic inefficiencies. The USC reflects a structurally weak and inefficient business model that is unsustainable without continuous government subsidies.
The report showed that the company’s sales decreased abruptly by more than 50% compared to the same period last year, which shows the company’s inability to retain market share or operate competitively. However, one of the reasons for the fall in sales was the government’s decision to finish the entity.
The report stressed that without a structural reform, including privatization, the digitalization of the supply chain, the direct orientation of the beneficiary (DBT) of the subsidies and the conversion to a wholesale model, USC will continue to exhaust fiscal resources without a viable path towards self -stable.
