Financial Times

Protests over unfair advantage to two shipping firms

Sections of the shipping industry have protested against the apparent favoured treatment given to private sector companies in a draft government contingency plan funded by Norway to deal with oil spills in the island's territorial waters.

Objections have been raised against the "unfair advantage" given to the former monopoly bunker supplier Lanka Marine Services, now a subsidiary of the John Keells conglomerate, and Master Divers in their being named as service providers in the National Oil Spill Contingency Plan.

The Ceylon Association of Ships" Agents (CASA) and the National Chamber of Commerce of Sri Lanka have made written protests to the Marine Pollution Prevention Authority, which is handling the project to deal with oil spills.

The contingency plan envisages the provision of a range of emergency services and skills along with specialized equipment required to limit the impact of oil spills and to remove pollutants.

LMS, previously owned by the Ceylon Petroleum Corporation, and Master Divers, owned by Ariyaseela Wickremanayake, are the only private sector companies named in Annex 2 of the plan, which lists the organizations involved in implementing the oil spill contingency plan and their responsibilities.

The other organizations are government departments and agencies.

The Ceylon Association of Ships' Agents has said that it had repeatedly told the committee handling the project that the MPPA should not advertise any private sector organizations, such as LMS and Master Divers, within the framework of support services in a "liberalised environment".

But the committee had ignored CASA's suggestions.

Identifying private companies without a transparent selection procedure would set a "dangerous precedent", CASA has warned in its letter to the MPPA chairman Dr. Sunil de Silva.

It demanded that any entity satisfying the laid down criteria should be allowed to participate.

The National Chamber of Commerce of Sri Lanka said it was "surprised" at the selection of Lanka Marine Services and Master Divers as organizations responsible to implement the National Oil Spill Contingency Plan without any information to the other private sector organizations and a proper procedure for selection.

It voiced "strong objections" to the selection of private firms without a transparent policy, which it said was unacceptable.

It too demanded the MPPA provide an opportunity for other private companies as well.

Mohamed Reza, chairman of the ports and shipping committee of the NCCSL, said the naming of private companies in the plan gives them an "unfair advantage" over other firms that could possibly provide equipment and services required in handling oil spills.

MPPA chairman Dr. de Silva said the names of the two companies, LMS and Master Divers, had been removed from the plan, which he said was still a draft and was yet to be presented to the Cabinet and Parliament.

However, he said he was not sure if the names of the two private companies remained in the annex that lists the organizations involved in implementing the oil spill contingency plan.

"No private company has been named in the main document," he said. "Initially it was there in the main plan but now it has been removed."

Dr. de Silva also said private companies were poorly equipped to deal with emergencies like oil spills.

"Except for the Sri Lanka Ports Authority and the CPC, none of these companies have enough equipment to handle oil spills. You need 2-3 km of booms whereas they have only about 100 metres of booms."

Oil booms are required to restrict the spread of oil slicks and to help in the recovery of spilled oil.

The industry is also objecting to the listing in the oil spill plan of several tugs and other vessels of Master Divers, which fly foreign flags and are therefore not allowed to operate in Sri Lankan waters.

The Merchant Shipping Act does not allow foreign flag vessels to operate in Sri Lankan waters.

Wickremanayake of Master Divers has twice been involved in controversy in recent times. He recently was accused by the Ministry of Port Development and Shipping of trying to bring in a LPG barge into Galle harbour without providing safety guarantees and insurance cover as requested by the SLPA.

The barge was later allowed in under a "one-off" exemption owing to pressure from the Consumer Affairs Ministry, which said the gas was required to give consumers a cheaper source of LPG.