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.