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On Wednesday, Federal Minister for Finance, Senator Muhammad Aurangzeb, presided over a high-level meeting of the Prime Minister’s Committee tasked with supervising the closure and privatization of the Utility Stores Corporation (USC). The meeting marks a significant step in the government’s broader public sector reform agenda aimed at reducing financial burdens and improving efficiency.
The committee was originally formed under the directive of Prime Minister Shehbaz Sharif, with a clear mandate: to ensure a smooth and transparent closure process, design a fair Voluntary Separation Scheme (VSS) for USC employees, and propose a structured timeline for privatization or asset sales.
USC Operations to End by July 2025
During the meeting, the committee reaffirmed the government’s decision to terminate all USC operations by 31st July 2025. This deadline underscores the urgency of transitioning from a state-run retail model to a privatized or alternate asset management structure, as part of broader fiscal consolidation efforts.
Established in 1971, the Utility Stores Corporation has played a longstanding role in providing subsidized goods to the public. However, in recent years it has faced mounting operational inefficiencies, financial losses, and criticism for being a burden on the national exchequer.
Voluntary Separation Scheme Under Review
A major point of discussion during the meeting was the formulation of a Voluntary Separation Scheme (VSS) to manage the impact of closure on USC’s workforce. The committee reviewed various models and approaches to ensure that the proposed VSS is fair, financially sustainable, and legally sound.
Several dimensions of the scheme were evaluated, including:
- The projected size of the workforce eligible for the VSS.
- Estimated fiscal implications of the payouts.
- Legal and operational risks associated with implementation.
- Long-term economic feasibility for the government.
The committee emphasized that any separation package must balance fiscal responsibility with employee welfare, particularly for long-serving staff who may face difficulty in transitioning to new employment.
Sub-Committee Formed to Finalize VSS Structure
To facilitate a detailed and technical examination of the VSS, Finance Minister Aurangzeb constituted a sub-committee headed by the Secretary Establishment Division. This body will include representatives from the Finance Division and Industries & Production Division, with the task of evaluating the scheme’s legal structure, operational contours, and cost projections.
The sub-committee has been instructed to submit its findings by the end of the week, enabling the main committee to finalize its recommendations for submission to the Prime Minister. The final report will adhere closely to the Terms of Reference (ToRs) previously outlined by the government.
Privatization Commission to Be Consulted
In addition to discussing the VSS, the meeting also focused on possible privatization or asset sale strategies for USC. The committee recommended that the Privatization Commission be brought in to provide technical input and evaluate the optimal structuring and feasibility of either full privatization or partial asset sales tied to USC’s operations.
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The involvement of the Privatization Commission aims to ensure that asset management and disposal follow transparent procedures and yield maximum value for the state.
High-Level Participation and Coordination
The meeting was attended by key government officials including:
- Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries & Production
- Secretaries of Establishment, Finance, and Industries & Production
- Managing Director of the Utility Stores Corporation
- Senior officers from the Finance and Revenue Divisions
Their joint participation reflects a whole-of-government approach toward managing the transition, underscoring the political and administrative importance of the initiative.
Conclusion: A Defining Moment in Public Sector Reform
The planned closure of the Utility Stores Corporation represents a major milestone in Pakistan’s ongoing efforts to streamline public sector operations, reduce unnecessary expenditure, and promote private sector efficiency. If successfully executed, the move could set a precedent for the privatization of other underperforming state-owned enterprises (SOEs) in the future.
While the decision will undoubtedly impact thousands of workers and long-standing public supply channels, the government insists that the process will be transparent, consultative, and driven by principles of fairness and fiscal prudence.
The coming weeks will be critical as the sub-committee prepares its recommendations and a full roadmap is presented to the Prime Minister. For now, the July 2025 closure deadline remains firm—marking the end of an era for one of Pakistan’s most recognizable public sector institutions.
