ISLAMABAD : The Economic Coordination Committee (ECC) of the Cabinet is to approve Supplementary Grant of Rs 30.216 billion to Ministry of Industries & Production to clear liabilities of USC employees, sources told Newzshewz.
Sharing the details, sources said, Utility Stores Corporation of Pakistan (Private) Limited (USC) was established on 3rd September, 1971 as a wholly owned government company to provide essential food items at subsidized rates and act as a price moderator. In 2007, USC’s network was expanded to the Union Council level, increasing the number of outlets from 1,023 to 5,557 and staff from 3,892 to 12,749 by 2009. This necessitated substantial subsidies to sustain USC operations. Despite support, USC incurred continuous losses since 2013, with accumulated losses reaching Rs. 23.8 billion as of June 2025.
On August 13, 2024, the Federal Cabinet placed USC in Phase-II of the active privatization list . Later, on August 16, 2024, the Federal Government decided to discontinue subsidies for the USC. To cut losses, USC Board approved a rightsizing plan in December 2024 which led to reduction in the number of stores from 3,742 to 1,904 and employees from 11,614 to 7,710 by February, 2025 .
Despite this rightsizing, the projected annual losses remained around Rs. 8.315 billion annually. Accordingly, a case was presented to the Prime Minister on June 28, 2025 with two options viz. (a) closure of operations by July 31, 2025; or (b) continuation of operations until privatization with Rs. 14 billion grant to clear vendor liabilities and stabilizes cash flow. The Prime Minister approved closure of USC operations by July 31, 2025 and constituted a committee under the Finance Minister to oversee closure, early privatization, and modalities for payment of VSS to regular employees. In line with these directives, on 2nd July 2025, USC’s Board of Directors approved closure of USC operations by July 31, 2025. Between 3rd
to 14th July, 2025, USC closed 1,059 rented stores and 1,230 franchise outlets. However, CBA and staff unions staged a sit-in at USC headquarters, Islamabad halting the process. To address concerns, the Prime Minister formed a committee led by SAPM on Political Affairs. Following meetings of this committee with CBA and staff union on 25th and 31st July 2025, the sit-in was called off.
The Committee chaired by Finance Minister held four meetings on July 16, August 15, 20, 22 2025 to review closure process. The committee also finalized following package to lay-off USC employees with a cost ranging between Rs. 16 to 19.5 billion ;(i) severance package of Rs. 13.225 billion for regular employees; (ii) compensation package of Rs. 2.192 to 6.337 billion for contractual and daily wagers employees to be finalized after negotiation with CBA which will not be used as precedent; (iii) terminal dues of Rs. 5.067 billion for employees and compensation; and (iv) package of Rs. 684 million for widows of employees in line with USC’s employment terms.
On July 31, 2025, USC ceased its operations nationwide and started shifting stocks from stores to warehouses for further disposal. Now by August 31, 2025, USC intends to lay-off majority of its staff. Furthermore, due to financial constraint, USC has not paid the salaries of its employees for the month of July and August 2025 as well as half month salary of April 2025 for which Rs. 1.467 billion are required for 7,710 employee.
The Committee under Finance Minister also instructed USC to obtain fresh valuations for its 21 properties to partially meet the cost of laying-off of staff and meeting other pending liabilities. In response, preliminary assessments conducted by State Bank of Pakistan approved surveyors informed the total value of these assets is between Rs. 10.5 billion to Rs. 12.6 billion . Out of these properties, the title of properties belonging to the Roti Corporation of Pakistan acquired by USC from the Privatization Commission is not transferred to USC.
To proceed with the sale, these properties first need to be transferred to USC, this may involve additional costs. A formal request has been made to the Privatisation Commission for the release of the original documents. Furthermore, certain USC properties are subject to leasehold rights, require building completion certificates, and are liable for commercialization charges etc. . Completion of record and obtaining aforesaid permissions etc. will require extra costs.
Furthermore, from September to November, 2025 around 832 staff (for maintaining 88 warehouses and 44 regional offices) will be required with a view to completing audit, stocks, stock reconciliation and auction, as well as dealing with pending and emerging litigation. This will entail an expense of around Rs. 210 million per month. Moreover, from December 2025 to June 2026, a further reduced workforce of 326 employees will be retained to assist in disposal of USC properties and to perform any residual tasks at a monthly expense of around Rs. 115 million.
The Committee further instructed the Ministry of Finance and USC to prepare a detailed cash flow plan mapping monthly inflows and outflows, which was presented to the Committee on August 22, 2025. The committee further emphasized early disposal of USC properties to generate funds for liabilities and tasked the Secretary Law & Justice Division to explore legal avenues for expeditious disposal of properties within the framework of the Privatization Commission Ordinance, 2000.
USC financial condition remains critical, with no funds available to pay for salaries as well as expenses for severance and compensation package and other dues of its employees. Further, USC intends to lay-off the employees from August 31, 2025 less the essential staff as explained in paragraph 6 above. It is essential that severance and compensatory package may be approved at the earliest. Accordingly, ECC has been requested to approve Rs. 30.216 billion as supplementary grant to Ministry of Industries & Production for USC, as per following details and cash flow plan ;(i) Rs. 13.225 billion for Severance Package to regular employees; (ii) Rs 5.751 billion for terminal dues of regular and contract employees and compensation for widows of employees who have died during service as per terms of employment; ( iii) Rs. 2.192 to 6.337 billion, exact amount to be finalized after negotiation with CBA as one-time compensatory payment to contractual and daily wage staff; (iv) Rs. 1.467 billion for payment of salary for April (15 days) and operational expenses for July and August 2025; (v) Rs. 630 million for retention of 832 staff from September to November 2025 and Rs. 805 million for retention of 326 staff from December 2025 to June 2026; and (vi) Rs. 2 billion for payment of liabilities of vendors while remaining Rs. 9.935 billion to be budgeted in FY 2026-27
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