Federal Government Utility Stores Privatization
Federal Government Utility Stores Privatization: The federal government has announced the closure of 1,700 loss-making utility stores across Pakistan as part of its privatization strategy. The decision comes as a major step in the government’s economic policies, under which 1,700 loss-making utility stores are being closed across the country. The aim is not only to reduce financial losses but also to make the institution more effective and efficient. The ongoing expenses of the Utility Stores Corporation were Rs 1.2 billion per month, but after the closure of loss-making stores, these expenses have been reduced to Rs 520 million. This decision has resulted in a monthly saving of Rs 220 million, while the overall loss has also come down by Rs 170 million to Rs 500 million.
Under this privatization plan, only 1,500 stores will remain operational and the remaining staff will be transferred to the surplus pool. At present, there are 5,000 permanent employees while 6,000 employees work on contract and daily wages. According to the government decision, permanent employees will be included in the surplus pool, while contract and daily wage employees will be laid off without any package. These steps are being taken to reduce the financial difficulties of the government and improve the management of the institution, so that the utility stores can be made more stable. More steps are also expected to ensure the provision of affordable and quality goods to the public, which will directly benefit the public in the future.
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Why Are 1,700 Utility Stores Closing?
The privatization plan includes utility stores in the government’s sell-off list. However, the process was delayed due to the non-completion of a biennial audit. Officials confirmed that the audit is expected to be completed by August 2025. Currently, Pakistan has over 3,200 utility stores, out of which 1,700 are incurring heavy losses. The decision has been taken to shut down these loss-making stores to reduce financial strain on the government.
Impact on Employees
The decision to close 1,700 stores will affect thousands of employees. Here’s how the staff will be managed:
- Only 1,500 stores will require staff after privatization.
- Permanent employees will be shifted to a surplus pool.
- Contractual and daily wage workers will not receive any compensation and will be laid off after privatization.
- The total workforce of Utility Stores Corporation includes 5,000 permanent employees and around 6,000 contract/daily wage workers.
Quick Overview of Utility Stores Closure Plan
| Feature | Details |
| Total Utility Stores | 3,200+ |
| Stores to be Closed | 1,700 |
| Remaining Stores After Closure | 1,500 |
| Total Employees | 11,000+ (5,000 permanent, 6,000 contract/daily wage) |
| Privatization Completion Deadline | August 2025 |
| Financial Savings | Monthly losses reduced by Rs 22 crore |
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Financial Benefits of Store Closures
Officials revealed that the monthly operational cost of Utility Stores Corporation was around Rs 1.2 billion. However, after closing the loss-making stores, this cost has been reduced to Rs 52 crore. Additionally:
- Monthly losses have dropped by Rs 22 crore.
- Total overall losses have decreased from Rs 67 crore to Rs 50 crore.
Government’s Strategy for Financial Stability
The federal government is implementing these changes to improve financial stability and manage utility stores more efficiently. By shutting down loss-making stores, the government aims to:
- Reduce financial burdens on state resources.
- Streamline privatization efforts.
- Enhance the efficiency of remaining stores.
Conclusion
The decision to close 1,700 utility stores is part of the government’s long-term plan to minimize financial losses and privatize inefficient institutions. While this step will bring financial relief, it will also impact thousands of employees. The government will need to manage this transition carefully to balance economic benefits with social responsibility.
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FAQs (Frequently Asked Questions)
Why is the government closing 1,700 utility stores?
The government is shutting down loss-making stores to reduce financial losses and advance privatization efforts.
How many utility stores are currently operating in Pakistan?
There are over 3,200 utility stores, but only 1,500 will remain operational after privatization.
What will happen to the employees of closed stores?
Permanent employees will be shifted to a surplus pool, but contract and daily wage employees will lose their jobs.
How much financial improvement is expected from this decision?
Monthly losses have already decreased by Rs 22 crore, and operational costs have reduced significantly.
When will the privatization process be completed?
The audit is expected to be completed by August 2025, after which privatization will move forward.
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