Now, CPC claims diesel clean as Harry J comes under AG’s probe

Fuel scam:

By Shamindra Ferdinando

The ongoing inquiry into the distribution of a stock of substandard diesel supplied by Vitol Group of Companies has taken an unexpected turn with the Ceylon Petroleum Storage Terminals Limited (CPSTL) admitting that the cargo in question had been cleared by its inspectors at Kolonnawa.

Maj. Gen. M. R. W. de Zoysa (retd), Chairman of CPSTL Monday (6) night acknowledged that the stock had been tested again after he had received complaints of the poor quality of diesel. He was responding to a query in a live Rupavahini programme Vedikaawa (Platform) on Monday night. The official said that as the cargo had met all the required specifications set by the CPC/CPSTL, he had authorised the offloading of the stock.

De Zoysa admitted that the CPSTL had continued to release the remaining stock to the market in spite of complaints from suppliers, including the government sector, as the tests ordered subsequent to criticism, too, proved there was nothing wrong with diesel. According to him, the second tests had been conducted on July 27 to ensure that the stocks of diesel released to the local market conformed to CPC/CPSTL standards.

Participating in the two-hour programme, anchored by Chamuditha Samarawickrema, were Petroleum Minister Susil Premjayanth, Petroleum Secretary R. H. S. Samaratunga and two senior CPC officials, Vidanagamage Dayananda and Susantha Silva. None of them disputed Maj. Gen. de Zoysa throwing his weight behind Vitol Group of Companies, which strongly denied wrongdoing on its part.   

Maj. Gen. Zoysa said that the CPC was in the process of investigating all aspects of the case.

Vitol Group of Companies on Saturday (4) said the cargo in question had been transferred into a shore tank containing products from one of CPC’s other suppliers and was mixed with that other product before being introduced into the local market. "Contamination could have occurred at any of a number of points between the terminal and the end consumers. We assume the investigation taking place will test every possible point of contamination to avoid further problems. We haven’t come across evidence to link the cargo supplied by Vitol with the reported damage to vehicles and machinery. The cargo supplied by Vitol came from a larger parcel of cargo which has been supplied to a number of Vitol’s customers in the region, where it has been consumed without incident and found to be fully on specification," a company spokesperson said.

The company has sent an expert to assist the CPC/CPSTL to conduct inquiries. The Island learns that the company has also hired local lawyers to investigate the incident.

The CPSTL Chairman admitted that he couldn’t explain how a consignment cleared by its own lab technicians could affect vehicles. Responding to a query by the media, the Maj. Gen. vouched for the standards maintained by government laboratories at Kolonnawa and Sapugaskanda.

De Zoysa insisted that there couldn’t be any dispute with regard to findings made by government laboratories. There hadn’t been any issue as regards the standards maintained by Kolonnawa and Sapugaskanda laboratories as they check eight to ten consignments monthly, he said. When pressed on the issue further, he admitted the urgent need to upgrade the testing facilities.

Minister Premjayanth, too, echoed the need to both upgrade laboratories as well as review local specifications. The minister, who is also the General Secretary of the SLFP-led UPFA, said that with the entry of more and more new vehicles to the local market the need to appraise the existing specifications applied by CPC/CPSTL had been felt.

Minister Premjayanth said that about 80 per cent of the vehicles affected by the low quality diesel were new vehicles. He said a change in local specifications, too, would be necessary with new developments in the motor vehicle industry.

Asked by The Island whether the CPC had a specific procedure to re-include blacklisted suppliers as the supplier (Vitol) in this particular case had been blacklisted in 2009 for supplying a stock of high sulphur fuel mixed with waste lubricants, Minister said that the Auditor General had been requested to investigate all spot purchases made from August 1, 2011 to July 31, 2012. 

Asked to comment on an attempt to blame former CPC Chairman Harry Jayawardene for reinstating the blacklisted company, the Minister said that the Auditor General would investigate the circumstances under which Vitol had been brought back as a supplier and the finalisation of spot purchases. The minister said that the investigation would establish whether the CPC under the previous management had deviated from set rules and regulations. During Jayawardene’s tenure, the business tycoon had held both posts of Chairman and Managing Director, the minister said, while explaining subsequent administrative changes introduced by him in consultation with relevant authorities, including the Attorney General.

When The Island pointed out that in spite of revelations made by parliamentary watchdog committees, Committee on Public Enterprises (COPE) and Public Accounts Committee (PAC) as well as various other commissions none of the top officials responsible for irregularities, waste and corruption were punished, Minister Premjayanth said action had been taken in that regard. The minister’s team remained silent.

Susantha Silva said that the CPC last Friday decided to suspend further imports from Vitol pending completion of ongoing inquiries. When reminded that a vessel carrying 40,000 MT of fuel from Vitol was on its way to Sri Lanka, Silva said that the suspension applied to future orders. He asserted that nothing was wrong in accepting previously ordered stocks. Unloading would be subject to checks carried out at both Kolonnawa and Sapugaskanda, the official said.

Vitol said that the CPC/CPSTL couldn’t ignore the fact that Vitol Group had secured 22 tenders for the supply of petroleum products, including 15 stocks of diesel during 2011.

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