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Who prevents Litro from using available equipment?

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Asantha responds to Udaya’s accusations

By Shamindra Ferdinando

Former Ceylon Petroleum Corporation (CPC) Chairman Asantha de Mel yesterday (27) said that Energy Minister Udaya Gammanpila should make a genuine effort to enter the lucrative LPG (liquid petroleum gas) market.

Minister Gammanpila, who is also an attorney-at-law, could find out who had prevented state owned Litro (formerly Shell) to undertake the project without further delay, De Mel said. “Consumers will benefit if the state entered the market. There cannot be any justification in depriving CPC /Litro opportunity to use available equipment.

The former national cricketer said so in response to The Island query whether he accepted responsibility for losses suffered in 2008 to the tune of Rs 37 mn when his controversial bid to enter the LPG market went awry.

The Island raised the issue with de Mel in the wake of Energy Minister Gammanpila calling for a report on what he called squandering of public funds on equipment et al which were never used. The former Chairman said that the incumbent minister couldn’t be unaware of what was going on at the time.

Mel said: “When Laugfs sought to extend the exclusive contract it had with the CPC to procure the entire stock of LPG gas output at the Sapugaskanda refinery, I on behalf of the CPC took up the position; the buyer should pay the real market price. They disagreed. When they declined to work out an agreement fair by both parties, I took the initiative to procure equipment necessary to begin bottling gas. They moved the Supreme Court against me over cases of hedging bringing my tenure as CPC Chairman to an end.”

The former CPC Chairman said that legal action prevented them from using the LPG produced at their own facility. Contrary to claims and unsubstantiated allegations, De Mel emphasized that the CPC undertook the project with the cabinet approval. The then Petroleum Minister A.H.M. Fowzie submitted a cabinet paper in that regard. Minister Gammanpila could easily verify it with the Cabinet office, De Mel said, adding that he wouldn’t even bother to respond to the Energy Minister if The Island had not raised the issue with him.

An irate De Mel said that for 12 years no one bothered to use the available bottling facility at Sapugaskanda. Now that the Minister Gammanpila had vowed to uncover the truth, the Pivithuru Hela Urumaya leader should first of all inquire into the circumstances under which the Laughs had entered into an exclusive agreement with the CPC to procure the entire LPG stock produced at Sapugaskanda at terms detrimental to the government. How could they expect the agreement to continue without any alterations, De Mel asked, expressing concern the incumbent government wouldn’t take tangible measures in that regard.

According to him, Laugfs moved court when the CPC was planning to call for tenders to procure gas cylinders.

Responding to another query, he said the Energy Ministry should reveal the amount of LPG produced at Sapugaskanda refinery that was made available to Litro and Laugfs, the per percentages and how the ministry intended to utilize the equipment acquired in 2008.

In April 2011, the media reported the government directing that CPC LPG output be shared 50 per cent each between Litro and Laugfs after the CPC unilaterally decided to split it 70 % to 30% in favour of Litro. The CPC moved prompted Laugfs to complain to the government.

The former CPC Chairman emphasized that prevention of state from competing with the private sector couldn’t be justified under any circumstances.

Accusations over hedging agreements signed by de Mel with two banks, in respect of buying fuel in late Nov 2008 led to his suspension by the Supreme Court. The SC also recommended that Minister Fowzie be replaced. Of the two petitions against De Mel, one was filed by the chairman of Laugfs gas company W.K.H. Wegapitiya, another petition by Kiniyawala Palitha thera, the then UNP MP Ravi Karunanayake MP and Ravi Jayawardena.



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SJB: Excise, FM officials all out to pocket Rs 1 bn

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By Saman Indrajith

Matara District SJB MP Buddhika Pathirana yesterday told Parliament that the Finance Ministry and Excise Department officials had misled Prime Minister Mahinda Rajapaksa and State Minister Ajith Nivard Cabraal in order to obtain billion rupees, fraudulently.

The officials had got a contract for printing stickers or barcodes to be displayed on bottles of liquor awarded to an Indian company.

“The project would result in one-billion-rupee loss to the government coffers annually,” the MP said, adding that the money being taken from the public purse would end up in the pockets of corrupt officials.

Pathirana said that the Excise Department had commenced a project to paste stickers on bottles of liquor to differentiate them from the fake and counterfeit bottles in the market.

“As per this project’s requirements, 32 million stickers would be needed per month. The stickers are to be purchased from Madras Security Printers company of India. This method was proposed in 2016 but it failed and the officials thereafter decided to introduce a barcode system.

“The cost of a sticker at 25 cents and the new barcode system will cost of two rupees a piece. This is a dubious deal. It seems that the Finance Ministry officials and the Excise Department heads have ganged up to give the contract to the Indian company and get commissions. There are many unanswered questions. First, the contract of printing the barcode too has been given to the MSP company, which could not secure the first contract. I want to know whether the proper procurement process has been followed. The second question is whether the barcodes would be up to the standards listed in the tender. Third question is who had selected the MSP company which is black-listed in India after being found guilty of frauds with Indian liquor companies in providing stickers to them. MSP has been blacklisted in many other countries. The company has been banned in Sudan and Liberia for supplying the stickers to private companies. The last question is whether this fraud is being committed with the knowledge of ministers of this government.”

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Reserves fall to lowest since 2009, rupee strengthening to be short-lived: report

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by Sanath Nanayakkare

Sri Lanka’s Foreign reserves had dropped to USD 4.1bn in March 2021, the lowest since August 2009, on the back of over US$ 4bn outstanding debt payment during April-December 2021 period, a report issued by First Capital Research yesterday said.

According to the report, rupee appreciation is likely to be short-lived considering Sri Lanka’s depleting foreign reserve position, high foreign currency debt repayment requirement and limited funding sources available in the market are expected to further increase depreciation pressure on the currency during 2Q and 3Q.

“We maintain our exchange rate target for 1H2021 at Rs. 196-202 with 2021 year-end target at Rs. 205-215 as mentioned in our ‘Investment Strategy 2021 – January 2021,” the report recalls.

“Sri Lankan rupee appreciated 5% against the US dollar over the last 2 market days reversing the continuous accelerated depreciation witnessed in January-April 2021. On 12th April, Sri Lankan rupee recorded a historical low of Rs. 201:1 US$. Ministry of Finance (MoF) reported on the same day that the government of Sri Lanka entered into a loan agreement with the China Development Bank (CDB) for US$ 500mn and MoF expected the funds to be disbursed during the same week. Following the announcement, the market registered a steep appreciation with mid-rate recording at Rs. 190.9 on April 19,” it says.

The total foreign debt repayment (capital and interest) for 2021 is US$ 6 bn, according to the report.

Meanwhile FC Research believes that the temporary appreciation in USD-LKR, may adversely impact earnings of export companies such as Hayleys, Haycarb, Dipped Products, MGT Knitting Mills, Teejay Lanka, Expolanka Holdings etc. in the short term.

“However, considering the potential future currency pressure, we expect an overall depreciation of approximately 12% for the rupee providing a significant gain for companies with foreign currency revenue”, FC research predicts.

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Govt. asks Opposition not to propagate lies

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By Saman Indrajith

Chief Government Whip and Highways Minister Johnston Fernando yesterday accused the Opposition MPs of abusing parliamentary privileges to mislead the public by propagating lies about the Easter Sunday terror attacks. 

Addressing Parliament, Minister Fernando said: “The Opposition MPs level wild allegations in the House knowing that they have the cover of parliamentary privilege. If they have anything substantial or any knowledge of the perpetrators of the Easter attacks still not in custody they can go to the CID and lodge complaints so that such complaints could be investigated.”  

Fernando said so after SJB Galle District MP Manusha Nanayakkara had told the House that he possessed evidence of those who carried out the Easter Sunday terror attacks.

Nanayakkara also said that the facts that he had were not in the report of the Presidential Commission of Inquiry into the Easter Sunday carnage.

“You are making various statements regarding the Easter Sunday terror attacks in the Chamber without any proof because you know that you have Parliamentary privilege. You even quoted some statements which are not included in the PCoI report. How did you obtain such information? Why didn’t you complain about this to the CID in the first place? Your action is aimed at misleading the public,” the Minister said. 

Minister Fernando said that the Opposition should stop insulting Archbishop of Colombo Malcolm Cardinal Ranjith by misinterpreting the latter’s statements. 

“When you are in the Government you never said that this is a Buddhist country. Now you are insulting the Cardinal too. You should not do that,” the Minister said. 

“The former Government should be responsible for the terror attack. Now we are trying to punish those who are responsible for it. We will take action against everyone who is responsible. You should support us, not try to obstruct the on-going investigations,” Minister Fernando said.

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