MoI seeks Rs 520m to revive NDL

- SANJEEV GIRI, Kathmandu

Oct 10, 2014-

The Ministry of Industry (MoI) has asked for funding of Rs 520 million to revive state-owned drug manufacturing company Nepal Drugs Limited (NDL). It said that it had urged the Finance Ministry to release the money with the assurance that the factory would be operated once again by the government itself.

Established about four decades ago, NDL is the country’s oldest pharmaceutical company manufacturing allopathic drugs. It has been non-operational for more than five years. The Industry Ministry is willing to bring the company back into operation within a year by adopting the Good Manufacturing Practice (GMP) standard set by the World Health Organisation (WHO).

The Department of Drug Administration (DDA) had initially asked NDL to obtain the WHO/GMP certification by mid-April 2012. The time limit was later extended till 2013. NDL is among the several companies that have not met the deadline. As per the government provision, no such company can come into operation without incorporating the government plan.

Likewise, as per the Industry Ministry’s plans for NDL, the government will form a mechanism under which it will purchase the drugs manufactured by the company for free distribution to the needy.  

According to Industry Minister Mahesh Basnet, the ministry has come up with a vision that the institution should be run by the government itself.

“People have a sentiment attached with the factory that manufactures drug. The government should not try to stay away from such factories,” said Basnet.  

“However, we should be aware and try to run the company professionally so that it doesn’t incur losses after coming into operation.” Basnet also revealed that the Finance Ministry wasn’t agreeable to the proposal of the Industry Ministry.  

As per the Finance Ministry’s report, the factory has been in the red since 2004-05, and its cumulative losses reached Rs 4.85 billion as of the fiscal year 2009-10.

Industry Ministry officials said that they had sent their decision to bring NDL back into operation to the Finance Ministry last month. However, the Finance Ministry has not responded.

“We have been waiting for the decision of the Finance Ministry. Once it makes a clear stance, we will move ahead. However, the Finance Ministry seems to be least interested in the proposal made by us,” an official said.

Out of the requested funding of Rs 520 million, the Industry Ministry has planned to spend around Rs 150 million on renovating NDL’s factory and bring it back into shape. The remaining amount will finance a voluntary retirement scheme (VRS) for a majority of the employees.

Though the factory hasn’t produced drugs for the last five years, it has been paying salaries to more than 200 employees.

The Industry Ministry plans to bid adieu to at least 150 employees in the first phase through the VRS. “The plan includes gradually cutting down the staff strength and hiring technical manpower,” the official said.

Published: 11-10-2014 09:39

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