Minister plays up, but Govt. pays up to Prima
By Sachithra Mahendra
The Government has agreed to pay a thumping Rs. 5,000 million to the Prima Company as subsidies after a long battle which led to flour shortages, temporary closure of nearly 100 bakeries and bread price increases.

The cabinet this week approved the payment, despite protests by Consumer Affairs Minister Jeyaraj Fernandopulle who asked for more bank guarantees for his ministry to make flour imports.

Minister Fernandopulle told The Sunday Times he had objected to the payment of subsidy to Prima, pointing out that a shipment of flour from Malaysia was on the way to meet the shortage.

He said that 10,000 metric tons of flour would be imported with the first shipment due on January 7. Mr. Fernandopulle said he took up the position that instead of paying a private company the subsidy, it would be better to provide the facility to the state sector so that they could handle imports on their own.

A Prima company spokesman said the government had agreed to pay the subsidy with arrears from February this year, after talks with Treasury officials.

The spokesman denied allegations of short-supplying the market and said that they were releasing about 2,000 tons a day to the local market while exporting only 400 tons a day.

But, on Wednesday the Government sent in two officials from the Consumer Protection Authority (CPA) to visit the Prima storage facility, in Trincomalee to inspect the flour stocks.

CPA Chairman M. Musheen told The Sunday Times that the team was sent to inspect whether the shortage was due to hoarding. He said he was awaiting a report from the team which visited the stores.

Bakers islandwide had been affected by the shortage of flour during the past two months with about 100 bakeries being forced to close down on a temporary basis, according to the President of the Bakery Owners’ Association.

The standoff between the government and the Prima company began soon after the UPFA government came to office in April. Minister Fernandopulle had demanded that the company submit the required documents for the payment of arrears, but later rejected the payment on the basis that the documents were not in order.

The then Singaporean Prime Minister Goh Chok Tong during his visit to Sri Lanka also took up the issue with the government.

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