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Further sale of CPC fuel stations
Government sheds pledge given to JVP unions
By Chris Kamalendran
The government has decided to privatize one third of its remaining fuel stations by forming a local company — going back on a pledge given to JVP and other trade unions which strongly oppose such moves.

Petroleum Resources Minister A.H.M. Fowzie confirmed that 100 sheds owned by the government would be transferred to the private company, with state bank funds—marking a significant policy shift after the Mahinda Rajapaksa government assured it would not privatize important state assets.
The minister said the government was doing this to avert a third player coming in from a foreign country. He was apparently referring to earlier plans to hand over hundred filling stations to Bharat Petroleum of India.

Ministry Secretary H. Gunasekara held discussions yesterday with private petroleum dealers to work out the details of the new company comprising some 18 selected private petrol shed owners who would be given Rs. 10 million each to develop their filling stations. This would be done on the basis of their past performance including those who have sold at least 75 loads (tankers) of fuel per month.

Mr. Fowzie justified the plan to privatize the sheds saying that the move would prevent some of the sheds being bought over by the IOC (Indian Oil Company) through various incentives.

The CPC’s JVP-affiliated trade union is strongly opposing the move and the party is to take it up with the government. A spokesman for the joint trade union front led by the JVP claimed the Mahinda Chinthanaya policy had specifically assured that CPC or its assets would not be further privatized.
The Sunday Times learns that the IOC has taken control of sheds more than they were offered under the privatization deal carried out nearly three years ago. This has been done bymaking them franchise dealers.Official sources claimed that the IOC repayments to the CPC had been delayed at regular intervals. They said the outstanding amount for purchases of fuel from the CPC during the past six months was Rs. 550 million.

IOC Manging Director K. Ramakrishnan confirmed to The Sunday Times that in addition to the 100 fuel stations they also had appointed 60 fuel stations as franchise dealers. Referring to the allegation about the delay in payments, he said that at any given time there were arrears.

Minister Fowzie had earlier told the trade unions the government had no plans to further privatize the CPC and wanted their assistance to manage the corporation profitably. He had said that the agreement with the Treasury which holds one thirds of the CPC shares (100 sheds) would lapse in 2008, and that until then the CPC should manage the sheds by minimizing losses.

The government of President Chandrika Kumaratunga made several attempts to go ahead with the privatization of the shares held by the Treasury to Bharat Petroleum. But the efforts were thwarted mainly due to trade union action by the JVP.

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