Government urged to exempt USC from PPRA rules

Managing Director, Utility Stores Corporation (USC) Mathar Niaz Rana has said that the government should exempt the corporation from PPRA Rules and allow long-term supplies contracts with manufacturers and mills to turn it into a profitable entity.
According to official documents, at a recent meeting he said USC cannot directly negotiate with the manufactures and lowest bidders, adding that the corporation is bound to purchase on the basis of whatever bid is lowest. He said that if difference in price of sugar is even one rupee, NAB and FIA start chasing the corporation due to which tender is scrapped.
Under the PPRA rules, USC must procure from the lowest bidder even if its price is higher than the market. It cannot negotiate prices and get packaging done and sell in the market. The documents further reveal that he said that USC has signed Memorandum of Understanding (MoU) with the Pakistan Post implying that whatever products Pakistan Post would sell at USC franchises, 10 per cent profit would be given to USC.
He was of the view that USC has never been in profit without generous subsidy from the federal government since its establishment. USC's cash flow has been disturbed for the past one and half years due to economically unviable stores and unchecked hiring of manpower.
He said the appointments of peons cannot help the Corporation in running its affairs, adding that USC is pressurized politically to hire loyalists. He said whenever Corporation starts process to remove daily wagers, there is a hue and cry. Presently, 570 employees are surplus, he added.
The total number of USC employees' stands at 13,276 with 5807 regular employees followed by 3820 contractual employees and 3649 daily wagers. Monthly salary bill of USC is around Rs 400 million. The equity has decreased from Rs 2.673 billion to negative Rs 1.808 billion. The working capital has come down from Rs 6.401 billion to Rs 130 million as on June 30, 2017.
There are reports that two General Managers of the USC have made the corporation hostage like what is happening in PIA and no Managing Director can take any decision contrary to their wishes as the two have political backing. The Ministry wants the Corporation to be run through Essential Services Act 1952 and those who are creating hurdles to be ousted.
The Corporation's payables to the vendors stood at Rs 7.247 billion whereas TCP payables are Rs 27.9 billion as on December 31, 2017 which includes slow moving stocks due to weak control of inventory. Payables are increasing as USC is utilizing vendors' money for its expenses.
The financial loss for six months for quarter ending December, 2017 was Rs 2.943 billion. Monthly sale is around Rs 2 billion against requirement of Rs 10 billion to achieve break-even. Rs 22.251 billion is outstanding against sugar subsidy from July 2011 to October 2014 whereas payable to USC stands at Rs 27.9 billion.