Pharmaceutical Corp. to get Rs. 14 b from State banks to settle bills

Friday, 29 May 2020 00:00 - - {{hitsCtrl.values.hits}}

Cabinet yesterday approved paying off Rs. 14 billion in import bills racked up by the State Pharmaceutical Corporation (SPC) though loans from the Bank of Ceylon and People’s Bank.

Under the Cabinet paper presented by Health Minister Pavithra Wanniarachchi, the two State banks would extend loans of Rs. 6 billion each, which will be used to settle the most urgent bills.

The loans will be structured in such a way as to give SPC long term repayment provisions.

“These payments are urgent and there have been concerns that non-payment has resulted in medicine shortages recently. The loans will be settled by the Treasury eventually,” Co-Cabinet spokesman Dr. Ramesh Pathirana said at the weekly Cabinet briefing.

There have been repeated appeals by the pharmaceutical industry to repay import suppliers. The Government in February attempted to raise the borrowing limit of the Vote on Account (VoA) that was in force at the time, saying additional money was needed to repay pharmaceutical suppliers, construction contractors and other stakeholders. However, the Government withdrew the proposal when it became evident they would not have been able to drum up sufficient votes.