ISLAMABAD: The Pakistan Tehreek-e-Insaaf (PTI) government has decided to temporarily suspend operations at the Utility Stores Corporation (USC) after deciding to stop procurement of all commodities.
According to the official order issued by the USC management, as directed by the joint secretary ministry of industries and production, the minister and secretary have directed to stop all kind of procurements at the regional and head offices immediately until further orders.
The USC provides daily use items to low income group at discounted rates. It has 5,500 retail outlets across the country and an employee base of 14,500.
The decision to halt procurement was issued by Adviser to Prime Minister on Industries and Production Abdul Razzaq Dawood and Ministry of Industries and Production secretary as the utility is embroiled in a financial crisis.
However, the directive raises a question mark over how the decision could be issued in presence of the utility’s board of directors.
At present, the USC has an inventory worth Rs4.5 billion, which it had procured to meet requirements of utilities across the country. Its monthly revenue is around Rs1 billion. Officials said that Adviser to Prime Minister on Industries and Production had also planned to shut down USC during the Musharraf era but could not succeed.
The USC was profitable during the Pakistan Peoples Party’s (PPP) tenure. However, since the Pakistan Muslim League-Nawaz (PML-N) government, the corporation’s fortune took a turn for the worse. Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM) have also been running on bailout packages due to losses worth billions of rupees.
The USC faced a loss of Rs1.36 billion during the first quarter of financial year 2017-18 with negative equity of Rs1.808 billion and outstanding amount of Rs5.6 billion to its vendors.
Consequently, most vendors had stopped supplying stocks to the corporation.
In 2010-11, during the PPP government, its profit was Rs843.19 million and subsidy was Rs8.9 billion. Its profit dropped to Rs775.28 million in 2011-12; however, subsidy increased to Rs12.4 billion. In 2012-13, USC’s profit jumped to Rs1.399 billion and subsidy also increased further to Rs18.53 billion to provide commodities at discounted rates.
However, when the government of PML-N came to power, the profit of the utility turned into a loss of Rs202.32 million in 2013-14 and subsidy also declined to Rs12.544 billion. Express Tribune