Islamabad:
The Government approved on Thursday RS25 billion in compensation package to fire another 6,878 employees of Utility Stores Corporation (USC), reducing the curtain to an entity of half a century that served the underlined with subsidized goods through its 5,600 points of sale.
Established in 1971, the USC had been attending the needs of unattended people by providing essential foods to subsidized rates and also acted as a price moderator.
However, after years of poor management due to the appointment of inexperienced people in management positions, the USC had losses, which led the government to close it.
“The Cabinet Economic Coordination Committee approved a Complementary Technical RS30.2 billion subsidy to guarantee the USC without problems,” said the Ministry of Finance after the ECC meeting.
Military ruler Yahya Khan had established the USC. Later, the Government of General Pervez Musharraf extended the USC network of 1,023 to 5,557 stores. But the government of Prime Minister Shehbaz Sharif decided to close it to save annual losses of RS2 billion.
The Pervez Musharraf government had increased the USC network at the level of the Board of the Union, raising the number of sales points of 1,023 to 5,557 and the personnel from 3,892 to 12,749 in 2009, the ECC was informed.
Of the 30 billion RS30, a number of RS25 billion has been approved to fire 6,878 regular, contractual and daily salary employees. The remaining 5 billion have been granted to the claims of clear suppliers, paying salaries of the previous months and for the salaries of 832 temporarily retained employees, which will also be fired within a year.
The Ministry of Finance said the decision represented an important step to address the financial burden of long -standing USC in the National Treasury, while safeguarding the interests of employees affected by the closure.
“By approving compensation, compensation and payment of pending quotas, the Government ensures that workers receive their rights, thus shocking the social and economic impact of the elimination of USC,” the ministry said.
ECC was informed that the cumulative losses of USC in the last 12 years were RS23.8 billion as of June 2025, less than RS2 billion per year. The losses of RS24 billion in 12 years were equal to 34% of the annual budget of RS70 billion in budget that the Government gives for discretionary expenditure in the schemes of the parliamentarians.
The ECC also decided that the Ministry of Industries and Production would further rationalize the financial requirements for the closure of USC. It was decided that USC assets, including properties, would be eliminated in the current financial year, so that the cost of closure was partially fulfilled through the income of the sale.
However, ECC was informed that 21 USC properties could not be easily eliminated, since the corporation did not have the property of many of these properties.
A preliminary evaluation carried out by the State Bank of Pakistan (SBP) informed the topographs informed the Government that the total value of those 21 assets was in the RS10.5 billion range at RS12.6 billion. Of these properties, the title of properties belonging to the Roti Corporation of Pakistan, acquired by USC of the Privatization Commission, was not transferred to USC.
The Ministry of Industries declared that these properties must first transfer to USC and that it can imply additional costs.
The Ministry of Industries had asked Prime Minister Sharif in June of this year to close the USC before July 31, 2025 or continue its operations until privatization with a subsidy of RS14 billion to eliminate the liabilities of the suppliers and stabilize the cash flow.
However, the prime minister decided to close the entity and constituted a committee, headed by the Minister of Finance, Muhammad Aurengzeb, to supervise the closure, early privatization and modalities for the payment of compensation packages to regular employees.
On July 31, 2025, the USC ceased its operations throughout the country and began to change the shares of stores for their elimination.
The ECC approved on Thursday RS13.2 billion for the compensation package for regular employees and RS5.8 billion for the fees of regular and hired employees. It also approved RS2.2 billion at RS6.4 billion for payments to contractual employees and daily salary. But the final figure will depend on the negotiations between the employee union and the government.
The Government approved RS1.5 billion for the payment of wages for the first half of April and to have operational expenses for July and August 2025.
RS2 billion approved for the payment of suppliers liabilities, while the remaining RS10 billion would be paid in the next fiscal year.
The ECC ordered the Ministry of Law to explore legal roads for the expeditious elimination of properties within the ordinance framework of the Privatization Commission.
