Cabinet endorses MOI’s proposal to revive Nepal Drugs Limited

Kathmandu, September 18

The meeting of the Council of Ministers has passed the proposal forwarded by the Ministry of Industry (MoI) to revive the now defunct Nepal Drugs Ltd (NDL), today.

Industry Minister Nabindra Raj Joshi informed that the Cabinet has given its approval to revive NDL and provide Rs 146.5 million as loan to reopen it. A few days back, MoI had sent a proposal to the Cabinet to give life to the defunct NDL, which has remained shut for the last seven years.

“Now we will intensify works to operate NDL as soon as possible. Operation of NDL will play a crucial role to increase supply of essential drugs across the country,” Joshi said, adding that the loan amount will be used to procure technology and machinery for NDL.

According to Minister Joshi, the government will hire professional management at NDL so that it can function in a better manner once it comes into operation. “The government will first hire management consultants who will suggest the government on hiring a professional management team for NDL. The professional management team could be selected from among the existing NDL employees or it could be experts from outside the company,” Joshi added.

Minister Joshi, however, said that the government will have less role to play at NDL once the professional management team is hired.

Unveiling a work plan of MoI to improve the country’s industrial sector, the ministry had last week announced to reopen different state-run industries that have remained shut and NDL was one among them. NDL owes around Rs one billion to the government.

Besides NDL, MoI also plans to revive other public enterprises like Agriculture Equipment Factory Ltd, Gorakhkali Rubber Industry, Nepal Metal Company, Birgunj Sugar Factory Ltd and Butwal Sugar Factory Ltd, among others, that have remained shut since long.

Meanwhile, officials of Ministry of Finance say that trying to revive NDL with full government support will be tough and challenging as NDL is already a sick government enterprise. “It would be better to operate public enterprises under Public Private Partnership model,” said Bashudev Sharma Poudel, undersecretary at the Ministry of Finance.

The Annual Performance Review Report of Public Enterprises (PEs)-2017 shows that only 20 PEs out of 37 PEs have made a profit with the remaining PEs incurring losses.