CPC’s dispatch of ENOC cargo flags off concern, costs

Tuesday, 2 July 2013 00:06 -     - {{hitsCtrl.values.hits}}

Serious doubts have arisen amongst high officials in the Government over the credibility of the Dsep testing done in Colombo on a shipment of gasoil (diesel) to Sri Lanka from the United Arab Emirates’ (UAE) Dubai Government-owned Emirates National Oil Company showing technically impossible levels of discrepancy in the two tests done in Colombo and the pre-loading tests done in the UAE. Sabotage is suspected in the testing at the Colombo end, to help a non-government private sector supplier eliminate from competition the UAE Government owned company, which had won a large number of tenders for supplies to the Ceylon Petroleum Corporation (CPC) and supplied without any complaint, high quality product exclusively available in the UAE at prices much lower than other tender applicants, most of whom buy from the market including from the UAE. Government sources suspect heavy oiling of palms in the industry, hitherto controlled by a small but powerful private sector cartel, an area in which the UAE organisation being a governmental body has no role. Emirates National Oil Company is headed by UAE’s Finance Minister Sheik Hamdan bin Rashid al-Maktoum, who is a brother of the UAE ruler Sheik Muhammed bin Rashid al-Maktoum. Internationally-reputed independent surveyors Geo Chem’s testing done at UAE’s Jebel Ali Port on 13 June confirmed a Dsep test result of 75 points, 25 points above Sri Lanka’s requirement of 50 points and above. According to these sources, a drop of about 10-12 points is at times possible due to climatic conditions during transport but the test done in Colombo on 22 June had showed an unbelievably low figure of 47 points which was contradicted by the second test done in Colombo, the very next day, 23 June, which showed a ridiculously absurd, zero points. This could be possible only if the samples had been adulterated prior to testing, sources said, adding, “if you lose a series of tenders, sabotage it”. The test in Colombo had not been done in the presence of the suppliers, a well-known international commercial practice. The test also lacked transparency due to the supplier not being asked to attend at least the second of the two tests done in Colombo, sources said. Raising further doubts about the credibility of the Colombo tests, an immediate request said to have been made by the UAE supplier for a joint test or a fresh test by an independent surveyor, that would have cleared or confirmed the credibility of the CPC testing process, had also been declined by a highly placed official, though recommended by the Commercial Division. Adding to the bizarre episode was an obvious arithmetical error in calculation in Colombo’s second test which instead of showing a result of 9.5 points showed ‘0’. The extremely wide discrepancy in the results of the two tests done in Colombo dropping from 47 points to ‘0’ or even 9.5 points, within 24hours, these sources said, indicates likely adulteration of samples prior to testing. In at least three previous similar instances involving competing suppliers, the facility to replace the cargo found unacceptable to the CPC, have been offered to the suppliers by the CPC, while in this case a request by the UAE State organisation to replace the cargo, without recourse to challenging the test had also been shot down by this official, though recommended by the relevant division. The failure by this top official to accept the suppliers offer to replace, will cost the country a whopping Rs. 80 million. Though the supplier’s tender awarded premium was $ 2.72 million, this official had rushed to give the order to the next bidder, a company from Indonesia at a premium of $ 4.69 million that would cost the CPC an additional sum of Rs. 80 million due to the officials failure to accept the UAE offer. A Petroleum Ministry source who declined to be named said there were ongoing discussions the Minister was having with President Mahinda Rajapaksa, following the sanctions on Iran to obtain a government-to-government supply of Sri Lanka’s requirements of crude to ensure an unbroken supply for its refinery and this may be an attempt to sabotage the Government’s move.