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Govt. may stop LIOC using Trinco storage facility

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Govt. may stop LIOC using Trinco storage facility

WEDNESDAY, 20 MARCH 2013 08:10
lioc60x60x60c60(1).jpgThe government is seriously considering whether to stop the Lanka Indian Oil Company (LIOC) from using the storage facilities at the Trincomalee Oil Tank Farm because the company is doing so without a legally valid agreement, a senior government source said yesterday.

He said the Petroleum Industries Ministry has sought the Attorney General’s advice on the best course of action.

“The Ceylon Petroleum Corporation (CPC) permitted the LIOC to use some of the storage tanks at the China Bay Oil Tank Farm when the LIOC entered Sri Lanka’s fuel distribution market during the Ranil Wickremesinghe Government. But both parties had failed to sign a proper agreement or had sought the Attorney General’s advice on the legal aspects of the offer,” the source said.  

The main issue here is that the CPC has no authority to give the permission to the LIOC because the CPC does not own the tank farm, which is a state asset.

“We are under heavy pressure from the Indians to sign the agreement as early as possible but considering the value of this state asset and the sensitivity of its strategic location we must be extra vigilant before taking a decision. Besides the LIOC pays only a nominal fee for the use of about seven tanks,” the source said.  If the Tank Farm is to be transferred to the LIOC it must be done by the Land Commissioner because the land where the Tank Farm is located belongs to the government. When the Indian Company was permitted to use the Tank Farm for fuel storage in 2003, there was no title clearance and therefore it is not legally valid,” he said.   

The source said a cabinet paper will be submitted shortly for their re-acquisition based on the Attorney General’s advice because the Indian company had been given the use of the tanks was a violation of several government regulations.    

 The tank farm consisting of 99 tanks is located on an 850-acre block of land. Each of the tanks has a holding capacity of 12,100 metric tonnes of oil. The Petroleum Ministry sources said the government expected to convert the petroleum storage tanks into a profitable venture with foreign investment.

 The China Bay tank farm that connects to the Trincomalee Harbour is of historic and strategic value and it is one of the largest tank farms between the Middle East and Singapore. It was built by the British in the 1930s to supply fuel to the Royal Navy vessels. During the nationalisation programme in 1957, the then Prime Minister S.W.R.D. Bandaranaike acquired the Tank Farm on a payment of 250,000 pounds sterling to the British government.

Meanwhile, the Attorney General Palitha Fernando said he had advised the two parties to come to an understanding on this matter and sort it out by themselves. (SAJ)


Rs 100 billion loss in three years
27656_imf.jpg

By Madusha Erandi

 

 

The losses accumulated by the Ceylon Petroleum Corporation (CPC) over the past three years, under the new Managing Director of the Corporation, have reached Rs 100 billion, Convener of the Voice Against Corruption (VAC), Wasantha Samarasinghe charged.

 

 

Addressing the media yesterday, he said, the CPC is increasing the fuel prices to cover up the huge losses.

"When the oil prices in the world market are reducing, the local prices are increased and the burden falls on the people. Fuel prices are calculated by the average of the month's price and the latest market price of a barrel of fuel in a five day period. That is a fair procedure. The managing director has signed a new agreement, according to which, the price of a barrel of oil is determined by calculating the average of the five highest prices recorded in a month. With the new agreement, the CPC had to suffer a loss of Rs 1,160 million last year," Samarasinghe alleged.

 

 

He also said the fuel suppliers are economically stable and can afford to issue loans for six months or more.

"An unqualified person has been appointed as the managing director of the CPC for a monthly salary of
Rs 700,000. The agreement, which was signed to mark the prices of fuel barrels, has expired but has been extended till 25 April. If the appointment of new managing director does not come through a legal framework, we will complain this to the Commission to Investigate Allegation of Bribery or Corruption. A management system called SAP has been established at the CPC, but the administration does not receive any outcome. Equipment or the training needed to implement the SAP system have still not been granted properly, but Rs 250,000 is being paid for the SAP system on an installment basis," Samarasinghe alleged.

 

 

He said the loans granted to the CPC workers have been cut off and the auditing procedures have also been abolished due to corrupt practises.

 

http://www.ceylontoday.lk/16-27656-news-detail-rs-100-billion-loss-in-three-years.html

Edited by மல்லையூரான்

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