Daily Times

ISLAMABAD: The fate of hundreds of employees of the Utility Stores Corporation (USC) hangs in balance, as the Pakistan Tehrik-e-Insaf (PTI) government weighs options to either to cut the size of the staff or to reduce the number of stores countrywide.

At the moment, the USC has no full-time managing director (MD). Iftikhar Shalwani, the additional secretary at Ministry of Industries and Production (MI&P), has the additional charge of the USC MD.

Following directives by Advisor to Prime Minister on Industries, Abdul Razaq Dawood, who heads the Descon Group of Companies, procurement was stopped indefinitely at the USC head office as well as zonal and regional offices, till further orders.

A senior official at the ministry, who requested annonymity because he isn’t authorised to speak to the media, says back-to-back rounds of meetings are underway at the ministry to devise a plan to overcome USC’s losses.

“The workforce at 5,400 stores across the country is around 14,000, including regular, contractual and daily-wage employees,” he notes.

The government will either cut the size of the staff, or reduce the number of stores. Either way, several stand to lose jobs.

Arif Shah, the chairman of the USC workers’ union, says the workers will put up resistence to any downsizing plans carried out in the name of austerity or cutting losses. The union has already obtained a stay order from a court barring the authorities from relieving any employee from service.

“It is a globally recognized practice that governments subsidise daily use commodities to protect vulnerable segments of the population. It is the responsibility of the government,” he says.

Shah warns that the union will stage series of countrywide protests if the government takes any measure which affect their livelihoods.

Downward spiral: lesser subsidies, higher taxes

A USC official, who wishes to remain annonymous, says that subsidies on various commodities were stopped by the caretaker administration some three months to control losses.

Officials at the MI&P recall that the USC used to be a profitable entity during the Pakistan Peoples Party (PPP) tenure. A downward trend in its financials started with cuts in subsidy and higher taxation during the Pakistan Muslim League-N government.

In 2010-11, the USC’s profit was Rs. 843.19 million while the subsidy was Rs. 8. 9 billion. In the PPP’s last year, the profit was Rs1.399 billion and subsidy was Rs.18.538 billion.

The year in which thePML-N took office, however, the USC posted a loss of Rs.202.32 million, while the subsidy came down to Rs.12. 544 billion – higher taxes accounted for almost all of the loss.

The losses have since surged and subsidy fallen. Because of its arrears towards the vendors, many leading brands have stopped supplying stocks to the USC.

Mismanagement or deliberate lack of attention?

The USC official hold the PML-N government’s decision to nominate a private board of directors responsible for this downward trajectory, since the members lacked experience to deal with the USC business.

Commodity                                Utility store            Open market

Sugar (5 kg)                                          Rs. 280                                Rs. 280
Sella Basmati Rice (5 kg)                   Rs. 735                                 Rs. 770
Broken (tota) Basmati Rice 5 kg      Rs. 265                                 Rs. 470
Split Chickpeas (Chana Dal) 1kg      Rs. 115                                  Rs. 125
Black Gram (dal mash) 1 kg              Rs. 115                                  Rs. 130
Dalda Ghee 5kg                                   Rs. 925                                  Rs. 930
Dalda Oil 5 litres                                 Rs. 940                                  Rs. 930
Nestle milkpak 1 litre                         Rs. 127                                   Rs. 135
Pepsi one-and-a-half litre                 Rs. 70                                     Rs. 75

A senior official points out that the Corporation has operated without a full time MD since four years now.

“Suppliers are not interested in doing business with us because we owe huge sums of money to them,” he says, noting that the sales in the month of Ramazan this year were the lowest in the last 15 years.

Saeed Khattak, owner of Akbar Khattak General Store in Rawalpindi, says in the last five months he has gained many new customers who used to earlier do groceries form utility stories. “There isn’t much of a difference between prices anymore,” he says.

Muhammad Agha, who has a burger stall in Rawalpindi, is among such customers. He says he has been buying all his groceries from a store close to his house, rather than taking the long trip to the utility store for a month now. “I noticed that there was no major difference in prices anymore. “When I used to buy groceries from the utility store a year back, I spent Rs. 2,000 less than what I’m spending now every month,” he recalls.

Published in Daily Times, September 10^th 2018.