|
|
 |
 |
| Sunday, 22 August 2004 |
 |
|
 |
Features |  |
| News Business Features Editorial
|
Petroleum - the third player For the "Third Player" position in the country's petroleum trade four parties were in the fray for the slot, three of whom were foreign government owned parties, viz., Hindustan Petroleum Corporation and Bharath Petroleum Corporation of India and Sinopec (Hong Kong) Ltd., of China. The only private party was the local contender East West Group, who failed to submit the requisite Bid Bond.
With the completion of the payment of US$.75 millions to the Treasury on 22/01/2004 for the CPC assets IOC of India now owns not only the 100 outlets they were presented with on a platter by the previous Government but also one-third of the Common User Facility, the CPSTL, in addition to the China Bay Oil Tanks. Lanka IOC has also been given the green light by the CPC for Lanka IOC to canvass the franchisee Filling Stations (private dealers) and enter into agreements with them, Lanka IOC agreement being for a period of twenty years. IOC is in the process of constructing several petroleum product gantries and tanks at the China Bay Oil Installation (more than 20 already completed) which will enable them to feed the entire country with its requirements of bulk petroleum products by making use of IOC owned more than one million ton capacity storage facility at China Bay thereby depriving the Common User Facility, the CPSTL, of its anticipated revenue. With these developments India's desire for the hegemonic domination of Sri Lanka in the Oil Economy has been heightened and India is now in the process of spreading its tentacles to swallow the entire Oil economy of this country. The position of the IOC is that they were invited to Sri Lanka by the previous Government and they are entitled to "VIP" treatment; for what purpose they do not say. Sri Lankan Government's undeclared attitude is that the IOC, which is Indian government owned, was invited to Sri Lanka as a buffer against the LTTE - a tall story to believe. Such fantasies do exist in the vocabulary of bungling bureaucrats and advisors who have vested interests outside Sri Lanka. In fact IOC has declined to go beyond Vavuniya to the North, leaving aside acting as a buffer against the LTTE. It is down the grape vine that IOC is already negotiating with LTTE for safe passage for their oil-carrying tankers to China Bay. Temporary With the change of the Government the selection of the Third Player was brought to a temporary halt. In the meantime Hindustan Petroleum withdrew from the scene and the Chinese Government owned "Sinopec" too is out of the race leaving only Bharath Petroleum to bargain without competition and negotiate for the Third Player position. Hon. Finance Minister's recent outburst that the "Ceylon Petroleum Corporation is a monster depending on the Treasury" is a clue to their thinking and is contrary to the pledges given by them during the last General Election campaign. Finance Ministry officials have already declared - perhaps sotto voce - that they are already planning to hand over the Third Player position of the petroleum trade in this country to Barath Petroleum of India. They are already at the negotiating table with the PERC and Treasury officials. "Indian Oils" comprise the Indian Oil Corporation, Hindustan Petroleum Corporation and Bharath Petroleum Corporation which are controlled by the Indian Government. They are in effect Business Associates. Bharath Petroleum Corporation is tipped to get the third players position in the local petroleum trade, obviously with the blessings of the Indian Government. IOC is now firmly rooted in the country as the second player playing on an "Indian-spin-doctored" playing field. Therefore it is at the height of one's insincerity and/or lunacy to accept that two associated companies carrying on business in the same trade, especially on foreign soil, will compete with each other to the detriment of their common interest. On the contrary they will play hand in glove with each other to eliminate the other competitor, their "common enemy", the Ceypetco. In this context is it prudent for the Sri Lanka Government to accept another Indian Government owned party for the third player position in the local petroleum trade and that too a Business Associate of IOC (the second player) thus defeating the very purpose of privatization via-a-vis competition?, a question that will have to be answered with national interest at heart. Indian way of privatisation of state business is within their domestic market, as was once pointed by the then Indian Privatisation Minister Arun Shourie to reporters in connection with the proposed privatisation of the Oil and Natural Gas Corp. Ltd. of India and the Gas Authority of India Ltd., whilst India encourages foreign investments in India. Privatisation Privatisation of state business has come to stay and the Private Sector is considered as the "Engine of Growth". If privatisation of State business in the Sri Lankan way - i.e., transferring of state assets to foreign governments - is to continue the so-called "Engine of Growth" will be immobilized (kota uda) and a ridiculous state of affairs will surface. Privatization should not be mixed with foreign investment. The privatisation of state business, if it is absolutely necessary, should be within the shores of the country and amongst local private entrepreneurs. In these circumstances the selection of the third player should be handled with the spirit of "privatisation vis-a-vis competition" in mind. In a scenario as described above. If an Indian Government controlled Institution is to be accepted as the third player it will be one of the greatest follies in the annals of the history of Sri Lanka and the envisaged competition in the petroleum retail trade will turn out to be the dictates of an Indian Oil Cartel and the death knell of a National Asset, the Ceylon Petroleum Corporation. In this context it is advisable to walk back the memory lane and ascertain the reasons as to the establishment of the Ceylon Petroleum Corporation and to reconsider the present system of the Selection of the Third Player. - Retired State Official To be continued |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
With the able assistance of PERC and Treasury officials, Indian oil
Corporation, under the name "Lanka IOC", is operating the best
profit-making 100 outlets in the island since the beginning of the second
half of 2003 thus earning a fabulous profit, that too without making any
initial investment to begin with, whilst CPC, in the name "Ceypetco",
operates the rest of the CPC outlets, of which 100 outlets have already
been earmarked for the third player. The Indian Oil Corporation made a
payment of US$.75 million for the 100 outlets and one-third of the assets
of the CPC except the Refinery.
