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Business Recorder
3 days ago
- Business
- Business Recorder
11,614 USC employees removed following closure of 1,925 outlets
ISLAMABAD: The government has shut down 1,925 loss-making Utility Stores outlets countrywide being operated by the Utility Stores Corporation (USC) and 4,060 out of a total 11,614 employees were sacked. Briefing the Senate Standing Committee on Industries and Production held here under the chairmanship of Senator Aon Abbas to discuss matters pertaining to various attached departments of the Ministry of Industries, Managing Director Utility Stores Faisal Nisar Chaudhry said the closure of these outlets has resulted in saving of Rs1.7 billion. The MD USC said that if the management failed to privatise the USC annually Rs7 billion will be required to pay the salaries of the employees. The MD of the USC told the committee that for the time being, 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 USC MD 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. He added that the USC was on the government's privatisation list. 'The target is to complete the two-year audit in August 2025' after which the privatisation would be carried out, the MD stated. He also informed the committee that an initial estimate of the USC properties had been made. According to the USC MD, there were 3,742 Utility Stores across the country, out of which, the government has shut down 1,925 loss-making stores. After the privatisation, only 1,500 stores would require staff. He also said that the USC's monthly losses had been reduced to Rs220 million. The chairman committee inquired the present status of Rightsizing in Utility Stores Corporation (USC). The department briefed the committee that restructuring/rightsizing plan aimed at the eventual privatisation of the USC was formally approved by the USC Board of Directors during its 185th meeting held on 27th December 2024. The USC is being restructured under the restructuring plan according to which the loss-making stores of the corporation are going to be closed and surplus staff thereafter is being laid off. As part of the ongoing restructuring plan of USC, 1,925 stores have been closed and around 4,060 employees (1,823 contractual and 2,237 daily wages) have been laid off. 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. The USC officials informed the committee that the secretary had forwarded recommendations at the highest level, requesting that Rs7 billion funds be allocated for USC in the upcoming budget. The MD USC said that the stores were running on government subsidies and now the government has decided to even provide Ramadan relief package through Benazir Income Support Programme (BISP) to needy people. He said that USC's outstanding payment stand at Rs25 billion. The MD USC further stated that 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. The chairman committee recommended that details of the employees recruited in 2007 and 2013 should be submitted in the next meeting, from each province providing 10 office orders. This will enable the committee to assess the duration of their contractual appointments. Additionally, it was recommended that representatives from the Board of Directors (BOD), CBA Union, and PC should be invited to the next meeting. The meeting also discussed the role, functions and achievements of Pakistan Industrial Development Corporation (PIDC). The officials, while briefing the panel on PIDC, said that at the time of its creation, Pakistan did not inherit any industrial base as East and West Pakistan combined had only 34 factories out of a total of 921 industrial units in the Subcontinent i.e. 3.6 per cent. They said that the 34 industrial units including, textile mills, cigarettes, rice husking, cotton ginning and flour milling, contributing only 7 percent of GDP and employing only 26,400 people out of an 80 million population at that time. The East Wing produced 70 percent of the world's jute, but there was not a single jute mill and West Bengal (India) was almost the sole buyer. In the West wing, only 16,000 of the total 15,00,000 cotton bales produced could be processed domestically. Further, they told that industrial units setup by PIDC between 1952-1984 were 94 and country's industrial growth during 1953-63 remained around 19.1 per cent which was almost solely due to PIDC. In 2005/06, a number of Section-42 (not-for-profit) Companies and Common Facility Centres were created as wholly-owned subsidiaries of PIDC for intervention in various sectors including gems and jewellery, marble/granite, handicrafts, sporting arms, dies and moulds, technology upgradation for skill imparting, setting up Common Facility Centres and introducing modern technology. The PIDC provided seed money for their establishment. However, the companies had their own independent management and boards, directly appointed by the government, relevant department stated. The committee was informed that the seed money provided is not recovered, rather it is treated as a grant or donation. The committee was apprised of the current status of PIDC projects. It was informed that Bin Qasim Industrial Park – SEZ (Karachi, Sindh), Korangi Creek Industrial Park – SEZ (Karachi), and Rachna Industrial Park – SEZ (Sheikhupura) have been developed. Naushahro Feroze Industrial Park – SEZ (Sindh) is currently under development. Block-A of Karachi Industrial Park – CPEC SEZ has received PC-1 approval (Rs7.4 billion), and the tendering process is underway. Additionally, Sargodha Industrial Park (Punjab) is also being developed. Following the briefing, Senator Saleem Mandviwalla expressed concerns regarding the Port Qasim area, stating that a significant land has no industrial unit established and land is so expensive that an investor would have to spend most of their funds just to acquire the land, leaving little to no resources for setting up the industry. He added that such conditions are unlikely to attract foreign investors, and even if they do come, the challenges are so overwhelming that they eventually withdraw. Copyright Business Recorder, 2025
Express Tribune
24-05-2025
- Business
- Express Tribune
Ghee millers demand payment of Rs13b dues
Listen to article Ghee millers have asked the government to clear the outstanding dues of Rs13 billion against the Utility Stores Corporation (USC). Ghee millers and other industries had supplied their products to USC but they were denied payments. The matter was taken up at a meeting between Prime Minister's Special Assistant Haroon Akhtar Khan and the Pakistan Vanaspati Manufacturers Association (PVMA) on Friday. PVMA Chairman Sheikh Umar Rehan, Ministry of Industries and Production Secretary Saif Anjum and representatives of the ghee industry were present in the meeting. The discussion focused on the challenges being faced by the ghee manufacturing sector. Haroon Akhtar acknowledged the concerns raised by the industry and assured them of the government's support. "We fully recognise the issues being encountered by the ghee sector and are committed to not putting the industry under any additional pressure," the PM aide said. He declared that all outstanding dues would be paid promptly. While acknowledging that cash disbursements take time, he emphasised that efforts would be made to expedite the process. He also highlighted the government's recent efforts to support the low-income families, stating, "PM Shehbaz Sharif has successfully delivered the Ramazan package directly to the deserving households."
Express Tribune
21-03-2025
- Business
- Express Tribune
6,000 utility stores staff to get the axe
The Senate Standing Committee on Industry and Production was informed on Friday that the framework for the privatisation of the Utility Stores Corporation (USC) was ready, under which 1,700 loss-making stores would be closed down and 6,000 employees would be sacked. The committee, which met here with Senator Aun Abbas Bappi in the chair, received a briefing on the future of the USC. The managing director of the USC told the committee that for the time being 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 USC MD said, adding that 5,000 permanent employees would be sent to the surplus pool, while 6,000 employees on contracts and on daily wage basis would be laid off. He added that the USC was on the government's privatisation list. "The target is to complete the two-year audit in August 2025" after which the privatisation would be carried out, the MD stated. He also informed the committee that an initial estimate of the USC properties had been made. According to the USC MD, there were 3,200 utility stores across the country, out of which the government decided to shut down 1,700 loss-making stores. After the privatisation, only 1,500 stores would require staff. He also said that the USC's monthly losses had been reduced to Rs220 million.
Express Tribune
21-03-2025
- Business
- Express Tribune
6,000 Utility Stores workers to be laid off as privatisation stalls
Listen to article The government has decided to place 5,000 permanent employees of the Utility Stores Corporation (USC) in a surplus pool, while 6,000 contract and daily-wage workers will be laid off, according to a briefing provided to the Senate Standing Committee on Industries and Production, Express News reported. The meeting, chaired by Senator Aoun Abbas, provided an update on the future of the USC, revealing that the corporation is on the government's privatisation list. The managing director of USC told the committee that the privatisation process has been delayed due to the absence of a two-year audit. The privatisation will proceed once the audit is completed, with a target completion date of August, 2025. The director further explained that in the interim, 5,000 permanent employees will be placed in a surplus pool, while 6,000 contract and daily-wage workers will be laid off. These workers will not receive severance packages when the corporation is privatised. Currently, the USC operates over 3,200 stores nationwide, with 1,700 loss-making outlets expected to be closed. Following privatisation, only about 1,500 stores will require staff. Additionally, around 1,000 franchises operate under the USC. The corporation's monthly operational cost was previously Rs1.12 billion, but following the closure of unprofitable stores, this has been reduced to Rs520 million per month. The committee members also expressed dissatisfaction over the absence of Special Assistant Haroon Akhtar and the secretary during the meeting, which was intended to brief the committee on the role and functions of the Sugar Advisory Board. In response, the committee decided to summon the Competition Commission for the next session. During the meeting, Senator Aun Abbas raised concerns over rising sugar prices despite a surplus in the country's sugar stock. He highlighted that 44 per cent of Pakistan's sugar mills are owned by political families and questioned why sugar prices were increasing when there was an adequate domestic supply. He pointed out that the government had permitted the export of 700,000 tons of sugar this fiscal year. Senator Abbas emphasised that sugar mill owners tend to raise prices toward the end of the crushing season and called for an explanation from both the Competition Commission and sugar mill owners on the matter. The committee plans to invite the Competition Commission and sugar mill owners to provide clarity on the issue of rising sugar prices.
Express Tribune
16-02-2025
- Business
- Express Tribune
Govt to lay off USC daily wagers
ISLAMABAD: The government has decided to lay off daily wage employees from utility stores across the country as part of its "rightsizing" policy, sources revealed on Saturday. The move, which affects an estimated 2,500 to 2,600 workers, was approved earlier by the Utility Stores Corporation (USC) board of directors. According to sources, directives for terminating employees have already been issued by the respective zonal offices, signalling the start of the downsizing process. The layoffs are in line with the government's broader policy of rationalising the workforce and reducing expenses. The decision comes as part of ongoing restructuring efforts within the USC, which has been under financial strain. While officials have cited economic challenges and efficiency concerns as the reason for the cuts, the move is expected to face resistance from affected employees and labour unions. The USC board had deliberated the matter in previous meetings, ultimately concluding that reducing the number of daily wage staff was necessary to align with budgetary constraints and operational efficiency goals. The government's "rightsizing" policy aims to streamline operations in state-run entities, potentially impacting other sectors in the future. It is pertinent to note that Federal Minister for Industries and Production, Rana Tanveer Hussain, recently clarified that the government has no plans to shut down utility stores but will instead restructure them. Responding to concerns raised in the National Assembly by PPP leader Raja Pervaiz Ashraf, he assured that the stores would continue operating, though reforms were needed to enhance efficiency. The minister noted that utility stores were originally set up to provide affordable essential goods, but many were established in unnecessary locations due to political influence. He acknowledged instances of political appointments within the organisation, which would be addressed during restructuring while assuring that regular employees' jobs remained secure. It is worth noting that there were rumours that the government would discontinue subsidies on sugar, wheat, and cooking oil. In December 2024, another proposal was considered to close 1,000 loss-making USC outlets nationwide. However, another proposal was to restructure the corporation to improve its financial sustainability. The government will face the daunting task of accommodating USC's 3,800 employees. The industries and production minister repeatedly said that the government had no intentions of closing the USC. In January, the Economic Coordination Committee approved Rs1.7 billion to settle the pending liabilities of USC under the Prime Minister's Relief Package. However, no additional budget was allocated for the upcoming Ramazan relief package.
