ISLAMABAD - Due to mismanagement, corruption and political interference, the Utility Stores Corporation is nearing collapse, the Senate Standing Committee on Industries was told on Wednesday.

Managing Director Mathar Riaz Rana told the committee that out of total 5,327 stores 4,470 outlets were in loss.  He said the corporation had 4,483 regular stores, while 518 were franchises.  Rana said that out of the total 13,451 employees 3,707 were on daily wages, while 5,853 regular. He said the organisation was in negative equity of Rs1.808 million and the working capital had shrunk from six billion rupees to Rs1.3 million.

The managing director said the monthly sale of corporation was Rs.2.3 billion.

During the discussion, the senators posed tough questions asking why other store chains including the CSD stores run by the army were a success but the USC with a huge infrastructure and reach was showing continuously huge losses. Officials said the corporation was started with 20 stores in 1971.

Since then the organisation grew to over 5,000 stores but it was being run on the same business model, which was adopted for twenty stores. If the organisation was not making profit who was responsible for the negligence, no one not even secretary Industries said anything. The USC falls under the administrative control of the Ministry of Industries.

The Secretary (additional secretary, in-charge) Mian Asad Hayaud Din insisted to have in-camera session where he could make some revelations. I cannot tell you more, here as "media friends" are also sitting, so let us have an in-camera session, secretary industries insisted.

Din, however did not disclose what was so secret about a public organisation making huge losses he want to reveal behind closed doors.

The meeting burst into a smile when Din proudly announced that the USC under his leadership was using some software – that can now calculate exact inventory of stores.

The claim was rubbished by Senator Attique Shiekh who said it was a common practice and it was nothing new or extraordinary.

Senator Kalsoom Perveen said that the technology was everywhere and even a cab driver was using mobile application for doing business. "Today you can get a taxi on mobile phone and in minutes Careem driver will reach your doorstep", she said. Senator Attique said that the army had been running a very successful model of CSD shops.

Should we appoint an army captain carrying a stick to make your organisation profitable, the senator asked the managing director.

He said being a businessman he personally knew that those supplying to the USC had become multi billionaires.

One of your suppliers told me recently that he is buying a plane, how come, your small supplier can buy a plane, while you are in huge losses, it is all crystal clear, the senator said.

On continuous probe of Senator Attique, the USC MD opened up and said that one reason of downfall of the organisation was political interference.  Governments tell them to expand and they have no choice but to expand without any planning, capital and long term approach, the MD said.

The PPRA rules, he said, were another hurdle due to which organisation cannot negotiate with the vendors directly and get concessions through some long-term bulk deal.

He said his office was buying directly from vendors and through middle man too.

The USC official said the organisation was being run by company ordinance and was registered with the SECP, whereas being a welfare organisation it had its own challenges.

He said another challenge was hefty receivables from government departments and the subsidy amount.

The senators appreciated the management that after 45 years finally they had realised that the USC needed a separate act and they were working on it. Earlier, while discussing the Pakistan Steel Mills the meeting appreciated the mill management for announcing to send the case of misuse of funds to the NAB.

They also told the name of the officials who were responsible for financial embezzlement in 2008. The officials said some of them died and others have been retired.  However, despite hard-hitting questions steel mill management failed to name the reasons why no action was taken against the officials since 2008.