ECC Approves Funding for Utility Stores Closure in Pakistan
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Pakistan Approves Funds for USC Closure,Addressing Employee Liabilities
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Published: August 28,2024,13:53:10 PKT
The Economic Coordination Committee (ECC) of Pakistan’s cabinet approved a Rs30.216 billion grant on Thursday,August 22,2024,to facilitate the closure of the Utility Stores Corporation (USC) and settle outstanding debts to employees and vendors.
USC Closure: A Timeline and Financial Breakdown
The Utility Stores Corporation (USC), established in 1971, was a state-owned enterprise responsible for providing essential commodities at subsidized rates to low-income families. Operating a network of over 4,000 retail outlets throughout Pakistan, USC officially ceased operations on July 31, 2024.
The ECC’s approval of Rs30.216 billion, as reported by Dawn, is intended to manage the financial consequences of this shutdown. this includes addressing liabilities to employees and vendors. Specifically, the government has committed to disbursing Rs27 billion in dues in two installments, following the USC’s closure, impacting approximately 11,000 employees.
| Financial Allocation | Amount (Rs Billion) |
|---|---|
| ECC Approved Grant | 30.216 |
| Employee & Vendor Dues (Total) | 27 |
Controversy and Concerns Surrounding the Shutdown
The decision to close USC has not been without opposition. The National Assembly Standing Committee on privatisation was informed of the payment plan for dues, but concerns remain about the impact on employment.
The Public Accounts Committee (PAC) urged the government to reconsider the closure, advocating for strengthening USC’s management and controls instead. The PAC warned that shutting down the corporation would leave thousands jobless, potentially exacerbating economic hardship for vulnerable populations.
The government maintains that the financial package demonstrates its commitment to employee welfare while ensuring fiscal duty during the winding down of USC’s operations. The disposal of USC properties will be used to meet outstanding liabilities.