ISLAMABAD – The federal government has decided to shut down the Utility Stores Corporation (USC) by July 31, 2025, terming it another unsustainable “white elephant” in the public sector. The decision was taken during a high-level committee meeting chaired by Finance Minister Muhammad Aurangzeb.
The USC, once aimed at providing subsidized essential items to the public, has long been a burden on the national exchequer due to consistent operational losses and poor financial management. The entity has become financially unviable, with cumulative losses reaching Rs15.9 billion and total liabilities exceeding Rs50 billion as of December 2024. In the first half of the last fiscal year alone, USC posted a loss of Rs6.1 billion.
In a bid to minimize the social impact of the closure, the government has proposed a Voluntary Separation Scheme (VSS) for USC employees. The scheme will target all 11,421 employees, including 5,217 regular staff members, at an estimated cost of Rs29.2 billion. Final costs will depend on the employees’ years of service and eligibility. The VSS is designed to offer a dignified exit to workers while helping the government reduce its financial liabilities.
A sub-committee has been formed to finalize the structure and benefits of the VSS, with recommendations expected by the end of this week. The Privatization Commission has been tasked with exploring options for asset liquidation or privatization of USC’s viable components.
USC joins a list of state-owned enterprises (SOEs) that have consistently drained public resources without delivering efficient services. Other examples include Pakistan Steel Mills and Pakistan International Airlines, both of which are also under restructuring or privatization plans.
Officials said the move is part of broader reforms aimed at reducing government expenditure, improving fiscal discipline, and aligning with ongoing commitments to international lenders. The Finance Ministry emphasized that institutions running on unsustainable subsidies can no longer be supported by the national budget.
The government intends to complete the shutdown process and the disbursement of VSS payments in an expedited manner, officially ending USC’s decades-long operations.
