Finance Ministers Goodall Gondwe has said Treasury will bail out Central Medical Stores Trust which is struggling to pay off a debt of K13 billion to some of its suppliers but warned the institution against procurement of drugs on credit.
Gondwe made the commitment on Wednesday in parliament when he was responding to the question from Rumphi Central parliamentarian Enoch Chihana (Alliance for Democrcay – Aford).
Chihana, who was speaking in the house during the committee of supply on Ministry of health allocations, asked the minister if Treasury has allocated funds to the Medical trust to pay off the debts which it owes suppliers of drugs for public hospitals.
Finance Minister said Treasury will pay the debts.
Gondwe said “it is true that Central Medical Stores Trust owes a number of suppliers a lot of money.”
He, however, warned the institution against abuses.
CMST needs about K40 billion (US$88.9 million) annually to adequately perform all its functions.
The Trust has however reportedly bought 10 new vehicles for its managers, six operational vehicles and five distribution vans in a K830 million transaction at a time it is struggling to pay off.
Spokesperson for the Trust, Herbert Chandilanga said since its establishment as a trust, CMST only procured five motor vehicles in 2012 and has, therefore, been relying on aged ones which were inherited from the then Central Medical Stores (CMS).
CMST is a public trust that sources medical supplies for public hospitals across the country.