https://arab.news/vnpfk
- Approved funds will cover severance, dues and closure costs of USC
- USC assets, including real estate, to be sold within current financial year
ISLAMABAD: Pakistan’s top economic decision-making body on Thursday approved a Rs30.216 billion ($108 million) funding package to wind down the Utility Stores Corporation (USC), a state-run retail chain that has long been a financial drain on the national exchequer.
The Economic Coordination Committee (ECC) of the Cabinet, chaired by Finance Minister Muhammad Aurangzeb, said the plan would allow for the orderly closure of USC while covering severance payments, employee compensation and outstanding dues.
“The decision represents a major step in responsibly addressing the longstanding financial burden of USC on the national exchequer, while also safeguarding the interests of employees affected by the closure,” the finance division said in a statement.
“By approving severance, compensation and payment of outstanding dues, the Government is ensuring that workers receive their entitlements, thereby cushioning the social and economic impact of USC’s winding up.”
The ECC said the Ministry of Industries and Production would rationalize closure costs and that USC assets, including real estate, would be sold within the current financial year to partially offset liabilities.
“The approved financial package underscores the Government’s commitment to protecting employees’ welfare while ensuring fiscal discipline in the winding down of USC’s operations,” the Finance Division statement added.
The decision marks a significant step in Pakistan’s efforts to reform state-owned enterprises, many of which face chronic losses. The closure of USC comes as Pakistan enforces fiscal discipline under a $7 billion IMF program approved in September 2024.
Established by the government in 1971, the corporation has a nationwide chain of retail outlets that provide essential commodities to the general public at prices lower than those in the open market.
The corporation took over 20 retail outlets at the beginning but now operates 6,000 stores across the country. The government allocated Rs65 billion ($229.7 million) to subsidize the products sold by the retail chain in the last fiscal year.
USC has struggled with inefficiencies, corruption scandals and mounting subsidies for years, with consumers complaining of substandard merchandise being sold and staff accused of vending subsidized products in the open market.