ISLAMABAD: Despite previous assurances from the treasury bench that there were no plans to shut down Utility Stores, the government is moving ahead with a voluntary separation scheme (VSS) for 11,000 employees of the Utility Stores Corporation of Pakistan (USCP).
This decision was revealed by Secretary of Industries and Production, Saif Anjum, during a Public Accounts Committee (PAC) meeting chaired by Junaid Akbar on Wednesday.
The final approval for the VSS will come from the Ministry of Industries in coordination with the Finance Division on Friday.
Anjum noted that this VSS offer is same previously used for employees of the Pakistan Tourism Development Corporation (PTDC).
Anjum cited a history of corruption, lack of transparency, and accumulating losses as the main reasons for the decision to cease USC’s operations.
Various venders had Rs14 billion liabilities against the corporation. The USC was intended to be a self-sustaining organisation, however, due to its losses, employees had not been receiving their salaries, he added.
While the corporation will stop operating nationwide, it will not be dissolved, and its assets will not be sold, he added.
The government also plans to transfer the food subsidy, previously managed by the USC, to beneficiaries of the Benazir Income Support Programme (BISP).
The ministry has also recommended paying all pending salaries and providing three basic salaries to contractual and daily-wage employees.
The decision has faced strong opposition from PAC members.
Khawaja Sheraz Mehmood criticised the closure as an “institutional killing” influenced by the International Monetary Fund (IMF), calling corruption and lack of transparency a mere excuse. He drew a parallel to the Pakistan Steel Mills (PSM), questioning why the government can pay salaries to a defunct corporation but not to USC employees who are already struggling.
Naveed Qamar noted that a VSS is being discussed even though many employees have already been laid off and are now jobless.
Saleem Mandviwalla suggested that instead of shutting down, the USC could be revitalised under a public-private partnership model, similar to projects in Sindh.
Amir Dogar recommended that the government allocate Rs 36 billion to compensate employees, arguing they spent their lives building the corporation’s assets, now valued at Rs 200 billion.
The committee chairman criticised the government for paying salaries to officials, noting that the managing director of USC was receiving a salary and had five cars at his home.
In response, the secretary stated that the managing director was not, in fact, getting a salary.
Sanaullah Khan Masti Khel suggested it should be merge with another government entity as it contributed in corona, flood and other disasters.
Earlier, the committee examined the audit reports of pertaining to Federal Education and Professional Training.
Copyright Business Recorder, 2025
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