The Pakistani government has unveiled a $150 million (Rs. 27 billion) financial rescue plan to address the ongoing crisis at the Utility Stores Corporation, which has halted operations and left thousands of employees and vendors unpaid.
Financial Package to Ease Debt Burden
The Ministry of Industries and Production informed the National Assembly Standing Committee on Privatization that the proposed package will be submitted to the Economic Coordination Committee (ECC) for approval. The plan aims to stabilize the corporation, which is grappling with a massive debt of $300 million (Rs. 54 billion). Key components include:
- Employee Support: $83–100 million (Rs. 15–18 billion) allocated for a Voluntary Separation Scheme (VSS) to compensate around 10,000 employees.
- Vendor Payments: $76 million (Rs. 13.8 billion) to clear dues owed to vendors, including major debts to the Trading Corporation of Pakistan and the Federal Board of Revenue (FBR).
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The committee expressed alarm over the closure of Utility Stores and the government’s delay in resolving outstanding payments, urging swift action.
Background: Utility Stores’ Struggle
Utility Stores, a state-run chain providing subsidized essential goods, has faced financial challenges for years. The government stopped subsidies in August 2024, and all operations ceased in July 2025, leaving employees without salaries for August 2025. The corporation’s closure has raised concerns about job losses and disrupted supply chains for affordable goods.
Employee Compensation and Privatization Plans
The ministry revealed that only 300 of the 10,000–11,000 employees will remain temporarily to manage operations until privatization is complete. The rest will receive payouts through the VSS, with officials promising “fair and competitive” compensation packages. The committee has demanded a detailed breakdown of these packages at the next meeting to ensure transparency.
What’s Next?
The ECC’s approval of the financial package will be a critical step toward resolving the crisis. The ministry is under pressure to finalize the compensation plan and vendor payments promptly to mitigate the economic fallout. The privatization process, expected to streamline operations, remains a key focus, with further updates anticipated at the committee’s next session.
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