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CPC to review Vietnam oil deal following charges of overpayment to supplier
View(s):By Bandula Sirimanna
State-run Ceylon Petroleum Corporation (CPC) says it will review a controversial Vietnam oil deal, following allegations that a higher-than-normal price was paid to the company, a top official said.
The deal was clinched two years ago in October 2011, when the CPC signed an agreement with Petro Vietnam oil (PV oil) Singapore to purchase 240,000 tons of refined petrol (gas oil). That quantity was subsequently increased to 320,000 metric tons, at an allegedly higher price.
When contacted, CPC Chairman Tilak Collure told the Business Times they are reviewing the agreement to ascertain whether it was amended to give the Vietnamese supplier an undue advantage.
He said that this matter was brought to his notice by trade unions and officials, but noted that nothing is conclusive until a thorough assessment is made.
Four of the six oil cargoes have been delivered with two to come.
The Coalition Against Corruption’ (CAC), an anti-corruption movement, alleged this week that this agreement was extended twice, amending its terms, forcing the CPC to cough up an additional Rs 1.4 billion. The group said the changes were brought to provide more favourable terms to the foreign company.
On the four cargoes already supplied, the CPC is paying an additional cost of over Rs 700 million, due to a payment manipulation clause in the agreement, Ananda Palitha, Secretary of the CPC arm of the Jathika Sevaka Sangamaya trade union, alleged.
He said the Cabinet paper prepared by the ministry indicated that the agreement with the supplier was to purchase the oil at a premium of US$1.57 per barrel (on top of the normal price per barrel), while the extra payment clause was hidden from the Cabinet.
CPC Chairman Mr. Collure however noted that the amounts mentioned by trade unions need to be verified and, until then, he cannot make any comments.
CPC trade unions have vowed to take this matter up with the Commission to Investigate Allegations of Bribery or Corruption, if the authorities fail to take action against those responsible for this deal.
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