The Government is to take full ownership of the Dr. Neville Fernando Teaching Hospital, with the Sri Lanka Air Force given day-to-day management under a hybrid operational framework approved by Cabinet.
The hospital and its assets will be transferred to a company wholly owned by the Treasury, while the Air Force takes responsibility for administration and daily operations, the Daily Mirror reported. EconomyNext reported the same decision, describing the result as a hybrid state-owned enterprise under the Air Force.
How the structure works
The company will be incorporated as a state enterprise under the Companies Act, with the Treasury holding 100% of its shares.
An 11-member Board of Directors will be appointed by the Secretary to the Treasury, on the recommendation of the Secretary to the Ministry of Defence — a chain of control that places a civilian health facility under defence-side nomination while leaving the shareholding with the finance ministry.
Cabinet approved the framework on a joint proposal by President Anura Kumara Dissanayake in his capacity as Minister of Defence, and the Minister of Health and Mass Media.
The money, and the deadline attached to it
The Treasury will fund staff salaries and operational expenses from 2026 to 2028. After that, the hospital is expected to operate as a self-financing institution.
That three-year runway is the substance of the decision. The hospital will provide both free and fee-based inpatient and outpatient services, and to support the free care the Ministry of Health and Mass Media will supply pharmaceuticals, medical supplies and consumables worth an estimated Rs. 125 million a year from its own budget.
So the “self-financing” target from 2029 applies to salaries and operations — not to the drug bill, which stays on the health ministry’s books on the reporting available.
A nine-year unresolved question
The hospital’s administration was transferred to the Ministry of Health with effect from 1 August 2017, under a Cabinet decision of 27 June 2017. Today’s decision settles ownership, which that transfer did not.
The Malabe facility has been run by the state for nine years without the state owning it outright. Neither of today’s reports revisits how that arrangement came about.
Not reported
Neither report states what the Treasury is paying, if anything, to acquire the assets, nor what the hospital’s assets are valued at. Neither says why the Air Force was chosen over the Health Ministry or the Army — which already runs military hospitals — what happens to existing staff contracts, whether the medical faculty arrangement is affected, or what the hospital’s current annual operating deficit is. No date is given for incorporating the company.
