USC to be shut down by 31st, employees offered VSS

Business Recorder

6 days ago

ISLAMABAD: The government has decided to close all operations of Utility Stores Corporation (USC) by 31stJuly 2025, and offer a financially viable Voluntary Separation Scheme (VSS) for its employees.
A high-level meeting of the committee constituted by the prime minister to oversee the closure and privatisation of the USC was held on Wednesday with the Federal Minister for Finance and Revenue, Muhammad Aurangzeb, in the chair.
The committee has been tasked with ensuring a smooth and transparent closure process, formulating a suitable VSS for USC employees, and recommending a structured timeline for privatisation.
Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, secretary Establishment Division, secretary Finance Division, secretary Industries and Production Division, managing director of the USC and senior officers from the Finance and Revenue Divisions attended the meeting Wednesday.
The committee led by the finance minister reviewed the progress made in the light of the tasks assigned to it and held detailed deliberations on the way forward. It was reaffirmed that, in accordance with the government's directives, all operations of USC will be closed by 31st July 2025. The committee discussed at length the formulation of a fair and financially viable VSS for the USC employees.
During the course of the meeting, the members examined various dimensions of the proposed VSS, including its projected size, potential fiscal impact, and legal and operational implications associated with its structure and rollout. The committee recommended that the Privatization Commission be consulted regarding the optimal structuring and feasibility of privatisation or alternatively asset sales linked with the USC operations.
To facilitate a comprehensive analysis, the chair constituted a sub-committee headed by the secretary Establishment Division.
The committee will include representatives from the Finance Division and the Industries and Production Division to examine the legal and operational aspects, contours, size, and structure of the proposed VSS and submit its report to the main committee by the end of the week. This will enable the committee to consolidate its findings and finalise its report and recommendations to be submitted to the prime minister in line with the terms of reference.
According to the USC restructuring plan recently shared in the Senate Standing Committee on Industries and Production, the closure of 1,925 loss-making Utility Stores outlets countrywide has resulted in saving of Rs1.7 billion.
The government has shut down 1,925 loss-making Utility Stores outlets countrywide while sacking 4,060 employees out of a total of 11,614. According to officials, in case, the government failed to privatise the USC, annually Rs7 billion will be required to pay the salaries of the employees. At present, the privatisation process had been stopped because of a lack of its audit for two years.
'The privatisation will take place after the audit is complete,' the officials said, adding that 5,000 permanent employees would be sent to the surplus pool, while 2,554 employees still on contracts and on daily wage basis would be laid off.
There were 3,742 Utility Stores outlets across the country, out of which, the government has shut down 1,925 loss-making stores. USC's monthly losses had been reduced to Rs220 million.
It was also disclosed that the USC will not have sufficient funds to pay salaries to its 5,000 employees beyond next month, due to the closure of a significant number of its outlets.
According to officials the USC's outstanding payment stand at Rs25 billion. The management has decided to offer golden handshake scheme to 25 percent of the USC employees, otherwise, Rs2.7 billion annually will be spent on the salaries of these employees.
Copyright Business Recorder, 2025