Nepal Drugs staff to be paid off too

AFTER paying off the staff of Janakpur Cigarette Factory, the government is preparing to adopt a similar modality for shutting down Nepal Drugs Limited, which has stooped production of most of its brands. The Finance Ministry has formed a Fast Track Committee headed by Undersecretary Prem Pandey to assess the actual amount required to pay off Nepal Drugs staff. The three-member team has been given a month’s time to make a recommendation. “The committee has been asked to make recommendation on paying off the Nepal Drugs staff in same modality adopted while paying off Janakpur Cigarette Factory workers,” said Dhundi Pokharel, coordinator of the ministry’s public enterprises division. After the paying off the staff, the government will take control of the drugmaker’s property and take necessary measures to operate the factory with the involvement of the private sector, according to Pokharel. He said some options being mulled include running the factory under the public-private partnership model, handing it over to the private sector on a long-term lease and management contract. The government recently provided more than Rs 160 million to the drugmaker to pay salaries to its staff until mid-July. Pokharel said pay off could be completed before Dashain. Nepal Drugs’ liabilities have been valued at Rs 1.26 billion, according to a study report prepared by the Public Enterprises Board (PEB). But a ministry official said the payment to the employees alone could require to Rs 1.15 billion, if their demands are fulfilled. If Nepal Drugs’ Employees Regulation is followed, the pay-off will cost only Rs 360 million. But government officials said that the factory’s employees are demanding additional benefits for their premature retirement. The company owes Rs 666.5 million in loans to the government. Its assets have been valued at Rs 5.37 billion The company has also not allocated the necessary amount in its retirement fund which has increased its liabilities to the government. Nepal Drugs has to arrange Rs 199 million in the retirement fund, according to the latest review report on public enterprises made public by the Finance Ministry Ministry officials say paying off the staff is a must as most of the existing employees will become ineligible after the company adopts the World Health Organization Good Manufacturing Practice (WHO/GMP). Ministry officials said it would cost Rs 500-550 million just to adopt the WHO/GMP standard which drug manufacturers were required to adopt by the last year.