Cleaning CPC

Monday, 18 July 2011 00:00 - - {{hitsCtrl.values.hits}}

The Ceylon Petroleum Corporation (CPC) seems to be stumbling from one incident of bad governance to the next. The fiasco of substandard fuel being released to the market has startled many people and showed the depth of corruption and incompetence within the State giant.

It was reported over the weekend that the ongoing probe on the import of contaminated fuel by the CPC from the Singapore-based Emirates National Oil Company, is baring some startling details. Independent inspectors at the port of loading had declared that the stock of oil purchased from Emirates National Oil Company (ENO) did not conform to CPC standards. Yet, the CPC’s Deputy Commercial Manager had directed that it be loaded.

When the oil cargo arrived in Colombo Port on 16 June, a sample had been tested at the laboratory of the Ceylon Petroleum Storage Terminal (CPSTL) Limited. Once again, it was found to be not in conformity with the Corporation’s standard specifications. For a second time, the Deputy Commercial Manager had ordered that the cargo be released to the filling stations on the grounds that it was a directive from Petroleum Industries Ministry Secretary Titus Jayawardena. The Secretary has been transferred to the Pensions Division in the Ministry of Public Administration.

The contaminated fuel deal is being probed by a committee headed by Power and Energy Ministry Secretary M.M.C. Ferdinando. The other members of the Committee are P. Samarakoon, Marketing Manager of the CPC and Piyasena Ekanayake, Project Manager for the Sapugaskanda Oil Refinery.

More than two thousand vehicles developed engine and carburetor problems after they were run on the contaminated fuel. The Ministry has assured compensation; but payments have not begun yet.

CPC trade unions are accusing both the Deputy Commercial Manager and the former Ministry Secretary of not following proper tender procedure.

According to the normal fuel procurement procedure, once offers are received by the CPC, they are submitted to the relevant Technical Evaluation Committee for scrutiny. Thereafter, this committee’s recommendation is submitted to a Special Standing Committee which decides on the selection of the acceptable tender. There are a host of other procedures that need to be followed as well, but all these were circumvented in this instance.

On top of all this the bowser owners are demanding payment of Rs.450 million in overdue payments that were allegedly promised to them. This is yet another indication of the extent of the financial mismanagement that the CPC is prone to and all the more reason for strong action to be taken. In addition to the loss of the money for the 20, 000 metric tonnes of fuel, the payment for the damage suffered by 2000 vehicles will add more financial responsibility. Moreover it needs good organisation to make sure that compensation is paid in respect of all damaged vehicles and that it is done as soon as possible. At this point the CPC admitting the full extent of the damage it has caused is seemingly taking immediate steps to sincerely put solutions in place.