Preliminary agreement in this regard was reached at last week’s cabinet meeting.

The CFC is now a loss-making state institution which is unable even to pay salaries of its employees.

The cabinet is due to take a final decision on August 09.

The CFC has a surplus of employees, says minister Mahinda Amaraweera, as it has 1,113 employee, whereas the requirement is for 642 employees only.

There has been no favourable response from the employees for a voluntary retirement scheme, and a final decision has to be taken very soon, says the minister.

For the past eight months, the CFC has obtained Rs. 700 million from the treasury to run the institution, with Rs. 210 million going to pay the salaries.

History of CFC

The then minister Philip Gunawardena started the CFC in 1964 under the state technical corporations act no. 49 of 1957.

It began its commercial functions in 1965, with the aim of benefiting both the producer and the consumer.

Leading businessmen supporting the UNP at the time, including ‘John Mudalali’, had opposed the establishment of the CFC.

However, the then prime minister Dudley Senanayake did not relent, saying he could not go against a decision by Gunawardena.