Islamabad – In a significant move aimed at reducing government involvement in non-essential business activities, the federal government is considering shutting down the Utility Stores Corporation (USC).
This development was revealed during a meeting of the Senate Standing Committee on Industries and Production held on Friday, chaired by Aon Abbas. Secretary of the Ministry of Industries and Production, Saif Anjum, addressed the issue in response to questions raised by Senator Saifullah Niazi.
Anjum stated that the government is seeking to extricate itself from non-core business operations, noting that subsidies provided to the Utility Stores have impeded market competition. He further explained that efforts are underway to reassign Utility Stores employees to other institutions, aiming to mitigate the impact of the potential closures.
In a follow-up discussion with the media, Aon Abbas expressed his concern over the government’s lack of a concrete plan for the future of Utility Stores approximately 60,000 employees. He described the situation as a bleak development for the nation, underscoring the urgency for a viable strategy to address the potential job losses if the decision moves forward.
The committee’s discussions also covered other key issues, including the inclusion of cold storage facilities within the industrial sector and the provision of affordable electricity rates. The matter of cold storage was referred by the Chairman Senate and has been forwarded by the Economic Coordination Committee (ECC) to the Cabinet for approval, which would officially designate cold storage as part of the industrial sector.
During the session, officials provided an update on Pakistan’s Auto Policy. They reported that 13 automobile companies are currently operating in the country, up from just three prior to the 2016-21 Auto Policy. This policy attracted eight new entrants, leading to a production capacity of 500,000 units annually across over 40 models with more than 100 variants. The automotive sector contributes four percent to Pakistan’s GDP, generates Rs300 billion in taxes, and supports over two million jobs. The 2021-26 Auto Policy has introduced WP-29 safety regulations, which have been adopted by all manufacturers except Suzuki. Suzuki has opted to discontinue three variants and redesign the remaining three to comply with the new safety standards.
Senator Saifullah Sarwar Khan Nyazee raised concerns about the safety of vehicles not adhering to WP-29 regulations, questioning accountability for potential fatalities involving such vehicles. Officials responded by highlighting the government’s export target of seven percent for the auto sector for 2024-25, though some companies have obtained court stays, claiming they cannot meet this target. Senator Saleem Mandviwalla criticized the quality of domestically produced cars, arguing that they fall short of international standards and struggle to find suitable export markets.
Senator Aon Abbas also addressed the issue of reimbursement for delayed vehicle deliveries. He noted that major car manufacturers, including Honda Atlas Cars, Indus Motor, Pak Suzuki, Hyundai Nishat Motors, and Kia Lucky Motors, have collectively paid around Rs5.32 billion in compensation to customers. The Competition Commission of Pakistan (CCP) is tasked with overseeing such malpractices. The committee has requested a detailed report on the compensation amounts, models involved, and delay durations to ensure transparency and fairness.
Regarding the Electric Vehicle (EV) Policy, officials outlined incentives to promote EV adoption, including lower customs duties on EV parts and vehicles compared to traditional ones. This policy aims to tackle climate change and diversify the automobile sector. Senator Saleem Mandviwalla emphasized the need for developing EV-friendly infrastructure to sustain the sector’s growth. In response, the committee decided to form a three-member Sub-Committee, led by Senator Saifullah Sarwar Khan Nyazee, to further analyze the EV policy and its implications.
