Privatization leads to thousands losing jobs as 1,700 Utility Stores close

The closure of 1,700 outlets by the Utility Stores Corporation (USC) is set to lead to a significant number of job losses, affecting over 11,000 employees. The USC, facing Rs14 billion in liabilities, announced that 5,000 regular workers would be moved to a surplus pool, while 6,000 contract and daily-wage workers would not receive any severance packages during the downsizing process.

The USC’s privatisation plans are currently on hold pending the completion of a two-year audit, expected to conclude by August 2025. The corporation’s immovable assets were last valued at around Rs8.3 billion while it carries a liability of Rs14 billion. This financial situation has contributed to the decision to reduce the number of operational outlets, impacting a significant portion of the workforce.

During a briefing to the Senate Standing Committee on Industries and Production, concerns were raised about the transparency of the USC’s workforce decisions. Employees are expressing increasing anxiety about their future job prospects. The Committee also directed attention to the rising prices in Pakistan’s sugar sector despite allowing 700,000 tonnes of sugar exports this fiscal year. Senator Aoun Abbas emphasized that a substantial portion of sugar mills are owned by political families and criticized the price hikes following the crushing season.

The Committee reviewed the role of the Sugar Advisory Board in regulating sugar prices. Officials clarified that while the board provides recommendations and monitors the National Sugar Policy, production, exports, and imports, it does not directly impact retail prices. To investigate possible market manipulation, the Committee decided to summon the Competition Commission of Pakistan (CCP) and sugar mill owners.

Frustration was expressed over the repeated absence of the Industries secretary during the session, with Senator Abbas issuing a warning for the official to be present at the next meeting. The meeting was attended by a range of officials, including Senators Masroor Ahsan, Saifullah Sarwar Khan Nyazee, Husna Bano, Danesh Kumar, and USC MD Faisal Nisar Chaudhry.

Overall, the USC’s decision to close 1,700 outlets has triggered uncertainties for thousands of employees, prompting concerns over transparency in workforce decisions. Additionally, the Committee highlighted issues in the sugar sector, focusing on the role of the Sugar Advisory Board in controlling prices and the need to investigate market manipulation. The forthcoming audit and continued discussions at the Senate Committee will provide further insights into the USC’s restructure and the implications it holds for both employees and the broader economic landscape.