ISLAMABAD: Pakistan will shut down the state-owned Utility Stores Corporation (USC) by July 31 as part of a broader government effort to restructure and privatize loss-making public sector entities, according to a statement from the finance ministry carried by state broadcaster Radio Pakistan on Wednesday.
The decision follows years of declining performance, mismanagement allegations, and heavy financial losses at the USC, a nationwide retail chain originally established in 1971 to provide essential commodities at subsidized prices to low-income households. The stores were once a key instrument in the government’s food security and price control policies but have faced mounting criticism over inefficiency, politicized staffing and weak oversight.
A high-level committee formed by Prime Minister Shehbaz Sharif to oversee the closure and privatization of the USC met on Wednesday in Islamabad, with Finance Minister Muhammad Aurangzeb chairing the session.
The committee is responsible for ensuring a transparent shutdown process, designing a fair Voluntary Separation Scheme (VSS) for USC employees and recommending a timeline for privatization or asset disposal.
“All operations of Utility Stores Corporation will be closed by 31st of this month in accordance with the government's directives,” the Radio Pakistan report said.
The committee “discussed at length the formulation of a fair and financially viable Voluntary Separation Scheme for the Utility Stores employees” and examined various aspects including its potential size, fiscal impact, and legal implications.
To support the analysis, a sub-committee led by the secretary of the Establishment Division has been formed and will submit recommendations on the structure and feasibility of the VSS by the end of the week.
The committee also advised that the government’s Privatization Commission be consulted on whether the USC's assets should be sold off or restructured for privatization.
The closure of the USC marks a significant step in Pakistan’s ongoing efforts to reduce the burden of state-owned enterprises on the national budget in line with reforms encouraged by the International Monetary Fund. Over the years, several audits and parliamentary reviews have pointed to chronic inefficiencies at the USC, including procurement irregularities and an inability to meet its mandate effectively in remote and underserved areas.