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Multi-billion rupee project in the pipeline to push up SL’s fuel buffer stock to 3 months

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BY SURESH PERERA

Sri Lanka has embarked on an ambitious multi-billion rupee initiative to significantly improve the country’s Strategic Petroleum Reserve (SPR) under an ongoing long-term plan to push up the buffer stock to approximately three months from the existing 21 days.

As a crucial element of the strategy, a new oil farm will be built at Muthurajawala, while enhancing the holding capacity at the Kolonnawa storage terminal in the backdrop of continuing talks with the Indian government to reclaim 84 unused tanks in the upper section of the Trincomalee oil farm.

The operation of the 99-tank Trincomalee oil farm complex was given to Lanka Indian Oil Company (LIOC), a subsidiary of Indian state-owned IOC, under a long-term lease in 2003. However, at present, only 15 tanks in the lower section of the gigantic British built WW2 era facility are being used by the Indian company.

“The minister is in talks with the Indian government to explore the possibility of using the 84 oil storage tanks now lying idle”, says M. Uvais Mohamed, Chairman/Managing Director, Ceylon Petroleum Storage Terminals Limited (CPSTL).

“We need to prioritize our focus on enhancing the available storage capacity as the national demand for fuel climbs by 5% per annum”, he said in an interview with The Sunday Island in his office at the sprawling, six-acre Kolonnawa oil terminal.

Sri Lanka’s annual import of fuel amounts to two million metric tons of crude oil and three million metric tons of refined oil.

The Chairman said that 50 acres were sought for the proposed Muthurajawala oil storage project (adjoining the existing CPSTL facility of 29 tanks) but only 25 acres were released. If the outright purchase of the land is considered too costly, a lease arrangement will be worked out.

“The idea is to build bigger oil storage tanks at the new Muthurajawala complex because they are more efficient and easy to maintain”, he explained.

Referring to the proposed storage capacity expansion at the Kolonnawa terminal, he outlined that the construction of nine new oil tanks are on the cards at a cost of Rs. 3 billion.

International tenders were called to build four 15,000MT, four 7,000MT and one 5,000MT oil tanks at the Kolonnawa complex, and bids were awarded to an Indian company to construct six of them, while the other three will be undertaken by a Sri Lankan enterprise using 100% local labor, Mohamed continued.

“One oil tank at Kolonnawa, which is unusable as it’s around 50 to 60 years old, will be demolished, while another with its bottom deck corroded can be repaired. We can do it for Rs. 50 million rather than spend Rs. 500 million to build a new one”, he said.

The Chairman stressed that Muthurajawala was earmarked for the new oil farm as Kolonnawa is a densely populated, cosmopolitan area with inadequate land resources for such a mega project.

“What is important is to enhance energy security by improving the country’s oil reserves to meet any contingency. That’s why we are looking at a three months’ buffer stock in the long run. This is a fair target because even a big country like the US maintains three to six months in oil reserves”, he noted.

Q: When do you expect to achieve the target of enhancing storage capacity under the ‘long-term plan?’

Within the next two to four years, we will be able to increase storage capacity by 100,000MT. The refurbishment of tanks, which are either not in use or cannot be used to their full capacity, is being undertaken. As a result, in another six months, we will be able to enhance capacity by 20,000MT. We are expediting the whole process. These are concrete plans, not wishes. Energy security is of paramount importance.

Q: You referred to talks with India on using 84 tanks in the Trincomalee oil farm. Has there been any headway?

The Minister is holding discussions on the matter, and as we maintain cordial relations with India, I think we will be able to work it out. This was government-owned land that was leased out to the IOC. The Sri Lanka government will decide on it. We should work together to make it viable and beneficial to the country.

Q: The CPSTL is largely dependent on the private sector bowsers for the distribution of fuel island-wide. Don’t you agree that CPSTL should have its own fleet of vehicles for this purpose in the event of a contingency?

At present, 88% of daily distribution of fuel is done by bowsers belonging to both the CPSTL and private owners. However, CPSTL owns only 158 bowsers, while around one thousand others are hired from private owners. I agree that we need to enhance our fleet to strike a balance. Though we have a good understanding with the private bowser owners, it is imperative that we have our own in sufficient numbers in case of an emergency.

We need to reduce costs and enhance efficiency through rail transport of fuel. We have added 27 more wagons to our fleet with the support of the CGR (Ceylon Government Railway). We maintain a bulk storage facility in Anuradhapura for distribution to the North. We have now procured six acres of land at Kankesanthurai for a proposed bulk storage facility to supply fuel to the North.

As the “bloodline of the nation”, it is our responsibility to ensure fuel supplies to all key segments of the economy, whether it is shipping, aviation, transport, power generation or industries. All of them depend on our service. We have to render an efficient and effective service to the nation to realize the President’s vision to make Sri Lanka prosperous.

Bringing greater efficiency to this sector even by a small percentage translates into a saving on the country’s foreign exchange reserves. It also has an impact on the trade balance and the economy as a whole.

Q: Was CPSTL able to achieve its target in terms of profits for 2020?

We were looking at a target of Rs. 1.6 billion, but even with the Covid-19 pandemic, we are optimistic of achieving Rs. 1.6 – Rs. 2 billion.

During the height of the Covid outbreak, we distributed hand and floor sanitizers free of charge to the police, armed services, health authorities and other key segments. During the general election, the Election Department made a big saving as we supplied the requirement of hand/floor sanitizers to polling booths.

At 42 years, Uvais Mohamed is the youngest Chairman to be appointed to the CPSTL. The brother of Justice Minister Ali Sabry, he is a management accountant with work experience in the United Kingdom, India and Bangladesh.

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Special COVID-19 probe crippled by infections among CCD sleuths: AG calls for new police team

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By Shamindra Ferdinando

Brandix Apparel Limited yesterday (29) said that the company would fully cooperate with relevant authorities in the investigation ordered by the Attorney General (AG). A spokesperson for the company said so when The Island sought a clarification with regard to AG Dappula de Livera, PC, directing the police to launch a criminal investigation into the alleged lapses on the part of the company as well as those officials leading to the devastating COVID-19 outbreak.

The Minuwangoda eruption, which happened in the first week of October is widely believed to be the cause of the fast expanding Peliyagoda cluster.

Asked whether the police had contacted the Brandix management as regards the investigation and sought access to Brandix management and workers at its Minuwangoda apparel manufacturing facility as well as records at the Minuwangoda facility, the spokesperson said: “We will work with the relevant authorities in this regard”.

The Colombo Crime Division (CCD) tasked with the probe has suffered a serious setback due to a section of its officers being tested positive for COVID-19. Authoritative sources said that the CCD lacked sufficient strength to carry out the investigation.

AG de Livera early this week told DIG Ajith Rohana that a progress report should be submitted to him by or before Nov. 13.

Sources said that the badly depleted CCD was not in a position to conduct the high-profile investigation, in addition to other ongoing inquiries. The AG has directed the Acting IGP to constitute a special team of law enforcement officers to conduct the investigation. Sources acknowledged the urgent need for a thorough inquiry into the far worse second corona wave. Sources said that the AG issued fresh instructions in that regard after the crisis in the CCD was brought to his notice.

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Most garment workers under self-quarantine left to fend for themselves

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By Rathindra Kuruwita

A large number of garment workers who were undergoing self-quarantine in Minuwangoda did not receive any assistance, Chamila Thushari of the Dabindu Collective, a labour organisation that works with garment workers, told The Island yesterday.

She said that those who were under self-quarantine did not have money to purchase food and even those who were willing to help could not reach them.

“Some of them have received food parcels from their work places but that is not adequate. Most others have not received any assistance. Matters will only get worse after curfew is imposed throughout the Western Province,” Thushari said.

Most of these workers are undergoing self-quarantine at their boarding places, which also house individuals who still work in garment factories. “Although there is a curfew, they can go to work. These are perfect incubators for the virus,” she said.

Thushari said that every day between 20-30 workers under self-quarantine, tested positive for COVID-19.

There were no public health inspectors to monitor the boarding houses of garment workers to ensure that COVID-19 prevention measures were being followed, she said.

“Not even Grama Niladaris visit them,” Chamila said.

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SJB requests separate seats for its dissidents

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Chief Opposition Whip and Kandy District MP Lakshman Kiriella has written to Speaker Mahinda Yapa Abeywardena requesting him to make arrangements to provide separate seats to the nine MPs who had voted with the government for the 20th Amendment to the Constitution recently.

The letter dated yesterday said that the SJB parliamentary group had decided to expel MPs Diana Gamage, A. Aravind Kumar, Ishak Rahuman, Faisal Cassim, H. M. M. Haris, M.S. Thowfeeq, Nazeer Ahmed, A.A.S.M. Raheem and S.M.M. Musharaf and it requests the Speaker to make separate seating arrangements for these MPs in the Chamber.

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