A five-member Cabinet Energy Committee sought the removal of Harry Jayawardena as Chairman of the Ceylon Petroleum Corporation (CPC) since he was not heeding its directives on tender procedures, it was revealed yesterday.
Minister John Seneviratne, Vice Chairman of the committee that monitors the country’s energy needs told the Sunday Times, “as a result, Petroleum Industries Minister Susil Premjayantha complained to President Mahinda Rajapaksa at the behest of the Committee. He said the Committee was giving advice on fuel procurements and the need to adhere to tender procedures. However, he said such advice had been ignored.
The Cabinet Energy Committee is chaired by A.H.M. Fowzie and includes Susil Premajayantha, Champika Ranawaka, John Seneviratne and Dilan Perera. One of the alleged irregularities, the Sunday Times learns, was the award of fuel supply contracts to a blacklisted company.
Meanwhile, Minister Premajayantha told the Sunday Times yesterday he has accepted Mr. Jayawardena’s resignation from the CPC. “I have sent a reply accepting the resignation with effect from Monday (tomorrow).”
However, Mr. Jayawardena, a multi-millionaire business tycoon, claimed he was quitting for personal reasons.
Irregularities in the award of tenders and alleged special treatment to a Swiss company that has been blacklisted have prompted Minister Premajayantha to order probes.
Mr. Jayawardena denied claims that he was involved in tender contracts and irregularities. "I have not got involved in the tender process and procurements. These are done by technical and procurement committees. I am only involved in the committee that gives the final approval. There is also a Cabinet appointed committee on CPC purchases. These are baseless allegations against me," he said.
While there have been several probes called by the minister against the CPC chairman in the past, the latest probe was over a former blacklisted CPC supplier, seen as a favourite of the chairman, being given many contracts.
Reiterating he was not involved in any of the procurement of petroleum products, Mr. Jayawardena also expressed concern over reports in the Sunday Times on CPC issues saying this media publicity over his alleged involvement in the irregularities at the CPC tender process might have been planted by interested parties. He said the whole country knew his integrity as a leading businessman. Senior Finance Ministry official Wasantha Ekanayake, who is the Treasury’s representative on the CPC board of directors, has been appointed as acting Chairman until a new appointment is made.
A top CPC official said Mr. Premajayantha had called for an internal audit inquiry into a recent controversial Low Sulphur Fuel Oil deal with Vitol - Singapore which had allegedly caused a delay in bringing down the 35,000-tonne shipment due by December 26. The CPC had incurred a loss of around Rs. 1 billion from this deal, he said.
During his tenure as CPC Chairman Mr. Jayawardena had to face several allegations including irregular tender procedures and charges that he favoured Vitol, which had been earlier blacklisted, and of late was being given most of the petrol and furnace oil contracts without following proper tender procedures.The glare of media publicity particularly in the Sunday Times was on the irregularities at the CPC during the past few months, and the tender process in the procurement of petroleum products continued to be manipulated at the whims and fancies of some top officials at this crisis-hit state agency.
Earlier Minister Premajayantha had assured that he would take prompt action to streamline the procedure exposing all corrupt officials engaged in these deals but officials said the CPC chairman’s influence with higher authorities including the President had blocked any stringent action including dismissal.
Several local agents of registered suppliers of petroleum alleged that Mr Jayawardana often directly contacted principal fuel suppliers overseas to inform them about tenders bypassing the local agents. This led to favoritism and underhand dealings as well as corruption in the oil procurement process in Sri Lanka, they said.
These charges have been repeatedly denied by Mr. Jayawardena. Meanwhile Aitken Spence’s pull-out from the Colombo South Harbour project had nothing to do with Mr Jayawardena’s recent dissatisfaction with the Government over various issues, a source close to the project said. There was speculation in the stock market that Aitken Spence pulled out of the project and is selling its 30 % stake because Mr. Jayawardena was miffed over the recent takeover of Pelwatte Sugar Co, which is owned by Distilleries Corporation which he controls.
“Aitken Spence pulled out totally for commercial reasons. There was no politics in this action. There was a cost overrun in the project and it was no longer viable for the company,” the source said.