Government Moves Ahead With Utility Stores Closure, VSS Plan Underway
ISLAMABAD – The federal government has accelerated efforts to close down the Utility Stores Corporation (USC) by July 31, as part of its broader economic reform and privatization agenda.
A high-level meeting chaired by Finance Minister Muhammad Aurangzeb was held at the Finance Division on Wednesday to review the transition. Senior officials, including Special Assistant to the Prime Minister on Industries Haroon Akhtar Khan, secretaries from multiple ministries, and the Managing Director of USC, attended the session.
Sub-Committee Formed to Finalize Employee Separation Plan
To ensure a smooth and transparent exit process, the committee discussed a Voluntary Separation Scheme (VSS) for USC employees. A sub-committee led by the Establishment Secretary—with support from the Finance and Industries divisions—has been tasked with preparing a detailed report on the structure and legal framework of the VSS by the end of this week.
The recommendations will guide the main committee in drafting its final proposal for Prime Minister Shehbaz Sharif, in line with the committee’s official mandate.
Financial Viability and Privatization Options on the Table
The meeting emphasized the need for a fiscally responsible and equitable separation plan, noting the operational and legal complexities involved. The Privatisation Commission has also been asked to evaluate whether a full or partial privatization of USC’s assets would yield better results for the government and taxpayers.
USC’s Financial Struggles Prompt Urgent Action
Established in 1971, the state-owned USC was designed to provide essential food and consumer items at subsidized rates to low-income households. However, the organization has faced significant challenges in recent years.
According to the Finance Ministry’s mid-year report for FY2024-25, the USC recorded a Rs. 4.1 billion loss in just six months, with cumulative losses reaching Rs. 15.5 billion. These figures highlight long-standing inefficiencies and justify the government’s move to wind down operations.
What’s Next?
The final decision on VSS and privatization models will be sent to the prime minister following the sub-committee’s review. If implemented as planned, USC’s closure could mark a major shift in how Pakistan delivers subsidized goods to the public—potentially opening doors for private sector solutions.
📌 Stay tuned for updates on USC privatization, employee compensation, and national economic reforms.
