CPC Sinking Further In Aviation Fuel To Mattala

One of the privately owned long-haul carriers taking aviation fuel to Mattala and Mattala airport

By Nirmala Kannangara-Sunday, April 21, 2013The already cash strapped Ceylon Petroleum Corporation (CPC) is facing further financial losses due to the transportation of aviation fuel to the Mattala Rajapaksa International Airport from the Kolonnawa refinery, claim trade unionists.

Non-availability of aviation fuel tanks at Mattala Rajapaksa International Airport and Hambantota Port has resulted in the Ceylon Petroleum Storage Terminal Limited (CPSTL) a subsidiary of CPC, sending aviation fuel to Mattala regularly in private road bridges (long haul vehicles) at a massive cost to the Corporation.

“For each load of aviation fuel that is sent to Mattala we have to spend Rs. 64,000 as transportation costs. Had we got the aviation tanks at Mattala and Hambantota we would have sent them by sea or if we have our own fleet of road bridges we would have minimized the losses,” said Secretary of the Jathika Sevaka Sangamaya Petroleum Branch Ananda Palitha.

According to Palitha, had the CPSTL its own fleet of road bridges, the transportation cost could have minimized. He said that the corporation’s failure to purchase road bridges over the years had clearly demonstrated the incompetence of the CPC and CPSTL Managements – both comprise the same Board Members.

“When plans were drawn to build the Mattala Rajapaksa International Airport, the CPSTL signed an agreement to supply aviation fuel for the aircraft. Later the management knew that the aviation fuel tanks either at Mattala airport or at the Hambantota Port were not ready to stock the needed aviation fuel for the aircraft that land at Mattala. But they still failed to purchase the necessary number of road bridges to transport this fuel, which is questionable. There was enough time for the CPSTL to call for tenders and purchase those road bridges but they were not interested to do so as they wanted to allow their ‘friends’ who own road bridges to earn extra money,” alleged Palitha.

Five private owned road bridges have been especially epi-coated by the CPSTL to transport aviation fuel to Mattala, which has cost CPSTL Rs.3 lakhs per Road Bridge. According to Palitha this amount would be deducted from the transportation fee.

“The CPSTL is supplying aviation oil to aircraft for the past 40 years but it is a pity as to why they failed to purchase the required number of road bridges in time. The CPC management is now claiming that calling tenders and to purchase these vehicles complying to government regulations takes a long period and that was why they could not purchase the road bridges by the time the airport was opened. This is hilarious. When the management has failed to abide by the government regulations when purchasing fuel which led to much pandemonium, why are they so particular about following government regulations when purchasing road bridges?” asked Palitha.

According to Palitha, had the CPSTL had their own road bridges with a capacity of 33,000 liters, they would have epi-coated them in order to carry aviation fuel to Mattala.

“Had the Hambantota port aviation tanks were ready by the time the airport was opened, CPSTL would have shipped the fuel consignments to Hambantota which would have cost less. From Hambantota port the fuel would have been transported by road since pipelines are yet to be laid from the port to the airport. Sending fuel to Mattala all the way from Kolonnawa in road bridges is an utter waste of money as we are an almost cash strapped institution. We are losing more money now,” said Palitha.

He further said that although the government kept faith in the Chinese to construct the aviation fuel tanks at the Hambantota port, the five aviation fuel tanks that have been constructed is not up to the standard.

“In these five tanks we can only store petrol or diesel but not the aviation fuel. These tanks have to be modified to international standards to store aviation fuel. Had they consulted the CPC, the corporation would have certainly helped to construct the five aviation fuel tanks but due to their failure, the government is losing more money,” added Palitha.

Palitha further observed that that it would be inevitable to stop fuel prices going up in the near future to cover up the losses.
“Although the CPSTL has got to pay transport fees for the road bridges that carry aviation oil to Mattala, there is no way how they can recover them as the aviation fuel cannot be sold for a higher price. If we do that, the airlines would re-fill aircrafts from Chennai.

Ultimately it is the general public that has to bear this extra expenditure. Very soon the government will increase fuel prices to cover up their ‘sins’ and burden the downtrodden masses,” said Palitha.

Meanwhile, a senior official at the CPC on condition of anonymity told The Sunday Leader that the ground under the oil farm at Hambantota port had started sinking and there were many construction defaults in the five aviation fuel tanks.

“This is dangerous. This would have been identified earlier. There are five tanks to store petrol and diesel and five tanks for aviation fuel. If part of the oil tank farm has started sinking what would happen to the ten tanks in future. If the tank areas too begin to sink when the tanks are full with fuel, the consequences would be grave. Since the work started without a proper evaluation this would happen even in other parts in the port in future as well,” said the sources.

He further said the main reason for the delay in constructing Mattala aviation tanks was because the plans that were initially drawn were not in a proper elevation.

“We had to get the plans re-drawn as there were many defects. Initially the elevations were not equal and that was the main reason for the delay. We have now accelerated the work,” said the sources.

Meanwhile, Managing Director, Ceylon Petroleum Corporation, Susantha Silva said that although there is a delay in purchasing the road bridges, CPC is in the process of getting down the necessary number of road bridges at the earliest.
“We cannot go to a certain place and purchase these road bridges, the way we purchase a motor vehicle. We have to call for tenders and then follow the government procurement procedure. That is why the delay is,” said Silva.

Silva further said that they had to face this situation because the Hambantota port aviation fuel tanks were not ready for storage.
“Since five aviation fuel tanks were under construction at Hambantota port we did not have a rush to purchase these road bridges earlier. However when we understood that these five tanks couldn’t be used to store aviation fuel by the time the airport was opened we had to accelerate the Mattala construction work. However that too did not work, as the Mattala aviation fuel tank construction plans were not in line. There was an issue with night work at Mattala because elephants started entering the construction areas and then came the unexpected rain for one month. In addition, installing the fuel hydrant system (fueling to aircrafts) is very sensitive and takes a long time. All these work cannot be completed within a shorter period. That is where the delay was,” claimed Silva.

However, Silva said that the two aviation fuel tanks at the Mattala airport would be ready to store the fuel by September this year and added that aviation fuel is not send to Mattala every day since there is no necessity.

“Once we finish the work by September, we will then draw plans to lay pipelines from Hambantota port to the Mattala airport to take the aviation fuel. Until then we will have to send the fuel to Mattala in road bridges. For the past week we only sent five loads to Mattala,” said Silva.
Asked as to how the CPC is going to recover the money that is paid as transportation cost for the private road bridges, Silva said that there was no way the corporation could sell the aviation fuel for a higher cost as the airlines would then go to the nearest airport to re-fill their aircraft which would be a colossal loss to the country.

“True we are now paying transport charges but still we cannot increase the aviation fuel prices. We have to supply the fuel to the accepted prices. Transporting the aviation fuel to Mattala from Kolonnawa is not a huge loss to the corporation. The difference between fuel transportation from Kolonnawa to Katunayake and Kolonnawa to Mattala is not a big difference as claimed by the trade unionists,” added Silva.

Asked as to how this transportation cost, which cannot be recovered from the airlines, would be settled and whether it would be recovered from the general public by increasing the fuel prices, Silva failed to give a proper answer.
“Since it is not a big loss, we would certainly not put the burden on the general public. All these allegations are made to mislead the masses,” said Silva.

Also, Colombo District UNP Parliamentarian Ravi Karunanyake said that governments’ ‘sins’ have to be borne by the general public.
“All these projects are white elephants. We had to tighten our belts over the past several years because of the unsuccessful Magampura Port (Hambantota port) and the Mattala International Airport. This is complete misuse of capital expenditure. Rs.68 million was spent on an unsuccessful seaport at Magampura and Rs.38 million at an unsuccessful international airport at Mattala. Have we ever benefited from these two white elephant projects? That is why I am saying that these are international jokes. How many ships have come to the Magampura port and how many aircrafts have landed at Mattala airport by now? This is utter waste of poor man’s hard earned money. This is the first time we have ever heard of an international airport without an aviation fuel tank. When I raised this question in parliament, Ministers Dr Sarath Amunugama and Susil Premjayantha accused me for levelling baseless allegations. Civil Aviation Minister Priyankara Jayarayne said that he would give me a return air ticket free of charge to go to Mattala and to see whether what I said was true or not. All these jokers are trying to mislead the people but what I am saying is the truth. If the aviation tanks are in order at Mattala why do the CPC send fuel stocks everyday to Mattala to meet the demand?” said Karunanayake.

He further said that he had come to know that the tank farm in the Magampura seaport had started sinking and added that the fate of the constructed tanks in the port is unknown.

“I challenge the Civil Aviation Minister to take me to the Magampura sea port, the Mattala airport and also to tell whether his ministry conducted an Environmental Impact Assessment (EIA) before the start of the Mattala project. Minister Priyankara Jayaratne would certainly not come forward to take up any of my challenges as he has lied to the people,” said Karunanayake.