ECC okays Rs30.2bn grant for Utility Stores Corporation closure

• Closure process to be transparent, organised, says ECC.
• Assets to be sold within current financial year.
• Closure costs to be covered from asset sales.

ISLAMABAD: The Economic Coordination Committee (ECC) on Thursday approved a package of Rs30.216 billion for the closure of the Utility Stores Corporation, with directions to ensure the process is carried out in a transparent and organised manner.

The summary, presented by the Ministry of Industries and Production, outlined measures for employee welfare and the settlement of dues. The ECC approved the sale of Utility Stores’ assets within the current financial year, adding that expenses related to the closure would be met from the proceeds of the sale.

The committee emphasised that the protection of employees’ rights remains the government’s foremost priority, directing the immediate payment of dues, compensation, and arrears to all staff.

The meeting was chaired by Finance Minister Muhammad Aurangzeb and attended by federal ministers Rana Tanveer Hussain, Jam Kamal Khan, and others, while Federal Minister for Energy Awais Leghari joined online.

According to The News, with the complete shutdown of Utility Stores, approximately 12,000 employees are at risk of losing their jobs.

As part of the transition, only 300 key employees will remain on board temporarily to facilitate the privatisation process of USC. The government plans to settle all outstanding dues and losses in three phases, ensuring systematic clearance of liabilities and protection of stakeholders.

Currently, the losses of the Utility Stores Corporation stand at Rs23 billion, while payments worth Rs14 billion are pending to private vendors.

Earlier this year, the Ministry of Industries and Production ordered the permanent closure of Utility Stores nationwide, ending decades of subsidised retail operations that served millions of low-income households.

The shutdown, effective July 31, halts all sales and procurement activities, according to a formal notification issued last month.

Under the directive, inventory from the stores will be shifted to central warehouses, while information technology systems and other physical assets will be auctioned transparently. Notices were issued to vacate rented premises starting August 1.

The decision follows a federal government directive to discontinue the Utility Stores, which had been struggling with inefficiency and financial losses. The stores, once a key outlet for subsidised essentials such as flour, sugar and cooking oil, faced mounting criticism for poor service delivery and leakages in the subsidy regime.

Prime Minister Shehbaz Sharif has directed the rollout of a Voluntary Separation Scheme (VSS) to cushion the impact on employees losing their jobs. 

Officials said the closure aims to streamline subsidy disbursement through more targeted programmes such as the Benazir Income Support Programme (BISP), which is being positioned as the primary social protection platform.

Utility Stores Corporation had operated hundreds of outlets nationwide since its inception in the 1970s, but shifting policy priorities and persistent financial strain ultimately sealed its fate.