No plan to close down Utility Stores

VIAAtif Khan
SOURCEThe Nation
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ISLAMABAD: Thousands of employees of Utility Stores Corporation on Thursday breathed a sigh of relief as the corporation rejected the plans of closure of the corporation.

A spokesman for the corporation informed journalists that the suspension of procurement by the corporation is temporary and it would be restored by next week.

The panic was created when Adviser to PM on Industries and Production Abdul Razak Dawood on Wednesday, reportedly ordered the USC to suspend purchases for the stores – the first business related measure taken by the PTI government after becoming in power.


The decision fell like a bomb on over 14000 employees, mostly working at meager salaries and without benefits.

The state-owned enterprise operating chain stores all over the country has been suffering a cumulative loss of Rs9.4 billion since 2013. Insider of the corporation blamed policies of the past for failure of the corporation.

“The imposition of advance tax and sales tax on items, delay in payments from government against the subsidies announced every year, Ramazan package, heavy receivables from public sector organisations, lack of modern store management practices, political interference and absence of leadership are blamed to be the other major causes of the fall of the corporation,” they said.

During last five years, more than 50 corruption cases have been registered against the staff in federal and provincial areas. The last time when the biggest chain of stores in the country earned a profit (Rs1.4 billion) was in 2012-13.

In June 2013-14, the corporation suffered a loss of Rs202million, Rs2.2 billion in 2014-15, Rs3billion in 2015-16 and Rs3.97 billion in 2016-17. According to official data, a number of government departments owe around Rs26 billion to the Utility Stores Corporation.

Also Read: PTI govt suspends operations at Utility Stores Corporation

Many believe that current assurance from the corporation was a cosmetic move as Ministry of Industries has stopped purchases and the clarification should come from the adviser himself.

During the meetings of Standing Committees of Senate and National Assembly, it was revealed that the corruption has weakened the fabric of organisation to an extent beyond correction.

No wonder insiders claim that the new government is seriously considering shutting down the operations of the Utility Stores to avoid further losses.

The USC was introduced to provide unadulterated food and non-food items to public at cheaper rates and to act as a price moderator and deterrent to profiteering, hoarding and black-marketing, but in recent past, it has miserably failed to do so, under present tight budgetary constraints there is not a single reason to have this white elephant, an official said. He insisted that no final decision has been taken so far and many options are under consideration.

Re-structuring is time consuming and costly, as USC’s huge receivables are pending and even if it is paid, the burden would be on national kitty, which is out of question in this economic crunch.

The official said the most suitable option is shutting down but it has political implications. Is new government ready to face 14000 protesters in every city of the country, is the question on which the future of USC depends, he said.

APP adds: In a statement, the USC spokesman said it has initiated revamping and restructuring of whole its countrywide networks of the stores in order to improve their performance to facilitate its clients on ensure supply of quality essential commodities on controlled rates. He informed that the ban on the procurement of the commodities was temporary and due to restructuring and would be removed soon after completion of the process.

Besides, he said that not any employee of the corporation would be removed from his job as there was no plan under the consideration of the government to close down the corporation.

However, he said that the Ministry of Industries and Production was working on the restructuring of the corporation to improve its performance and due to revamping process the ban on the procurement was imposed, which would be lifted by the next week.

The spokesman further said that the USC was determined to facilitate the common man in the country by providing them the essential daily used quality commodities on controlled rated through its network across the country.

(This news/article originally appeared in The Nation on August 31st, 2018)

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