Provincial Councils and Local Government Ministry says that local government bodies have to pay the Government Rs659 million.
Issuing a communiqué the Ministry said that therefore Minister Faizer Musthapa had instructed Ministry Authorities to take immediate legal action against local government bodies that do not repay.
Loans have been provided from the National Credit Loans and Development Fund to Local Government Bodies for Development Projects.
Although the National Loans and Development Fund is implemented under the Local Government Ministry, funds are provided to it from the Government Treasury.
Out of local Government Bodies, the Dambulla Municipal Council has to pay the biggest amount of loan which is Rs118 million.
The Ministry said that in addition, the Balangoda and Gampola Urban Councils owe a huge amount to the said Fund.
Provincial Councils and Local Government Ministry Secretary Kamal Padmasiri told our news team that in the future legal action would be taken against local government bodies that do not repay loans.