The government has announced plans to settle pending payments worth Rs27 billion owed to employees and vendors of the Utility Stores Corporation (USC) following its closure, according to updates shared with the National Assembly Standing Committee on Privatisation on Monday.
Phased Payment Plan for Employees and Vendors
During a briefing chaired by Dr. Muhammad Farooq Sattar, officials highlighted that the USC’s shutdown has been finalized, but ensuring fair treatment for its roughly 11,000 employees remains a top priority. The financial package is expected to receive formal approval at the next Economic Coordination Committee (ECC) meeting.
The breakdown of the dues indicates that Rs15.18 billion will fund a voluntary separation scheme (VSS) for employees, while Rs13.8 billion is earmarked to clear outstanding payments to vendors. Vendor payments are set to be disbursed in two stages, prioritizing those facing the most urgent financial strain.
Minimal Staff Retention During Privatisation
Authorities noted that only about 300 employees will remain with USC until the privatisation process is completed. USC, which operates over 4,000 outlets nationwide, has reportedly been running at a loss since subsidies were removed. Total pending obligations, including amounts owed to the Trading Corporation of Pakistan and the Federal Board of Revenue (FBR), currently stand at Rs46 billion.
USC’s Shift from Profitability to Loss
Committee members were briefed that USC was profitable while government subsidies were in place, with losses mounting only after the subsidy program ended. Concerns were raised over continuing the closure despite earlier advisories recommending against it.
Senator Sehar Kamran emphasized the importance of safeguarding employees’ rights and warned against repeating the mistakes of previous closures, where workers were left vulnerable after shutdowns.
USC’s Original Mandate
Established to curb market manipulation by wholesalers and retailers, the USC has historically aimed to provide essential goods to underserved areas at subsidized rates when necessary. Its closure marks a significant shift in the government’s approach to managing essential commodity distribution.
