Corruption-busters unite! Petitioner in the LMSL case, Vasudeva Nanayakkara and Nihal Sri Ameresekere, one of the respondents, with lawyer and rights activist K. Thiranagama (right) in discussion on the sidelines of a public event where the duo was felicitated. Pic by J. Weerasekera

The Ceylon Petroleum Corporation says it wants to get the Lanka Marine Services (LMSL) bunkering facility back after the Supreme Court last month denounced its privatisation as an ‘illegal transaction’.
CPC Chairman Asantha de Mel told The Sunday Times FT that the corporation is exploring the possibility of taking over LMSL, a former CPC subsidiary. He said the land belongs to Sri Lanka Ports Authority and the cabinet of ministers should take a decision on handing over the bunkering operations to CPC again, and added that he was planning to make a request from the Minister of Petroleum and Petroleum Resources Development A.H.M. Fowzie to persuade this matter.

Meanwhile LMSL workers say they fear losing their jobs after the vacation of John Keells from the oil tank site as the management has not given any assurance on their job security. A trade union official said that a joint trade union front with members of Inter Companies Trade Union Federation, the Jathika Sevaka Sangamaya and Sri Lanka Independent Workers Union has been formed to look after the interests of 113 workers attached to the company.

When contacted a senior official of the HR Department of the company declined to comment on the plight of workers only saying they had to vacate the premises on August 20 as per Supreme Court Order.
Meanwhile under-fire Treasury Secretary P.B. Jayasundera, who has asked that he be relieved of his duties over the controversial deal, joined a top level delegation led by President Mahinda Rajapakse that left to attend the 2008 Beijing Olympics which opened on Friday.

Dr Jayasundera was also part of the presidential delegation for last week’s SAARC summit. The President has said no action will be contemplated against the Treasury Secretary, who was criticised by the Supreme Court over the deal which was his responsibility as the then chairman of the Public Enterprise Reforms Commission (PERC), until the SAARC summit and the Beijing visits are over. President Rajapaksa is due to return on August 11. The Treasury Secretary’s departure on Wednesday came as a civil society organisation headed by veteran rights activist Kumar Rupasinghe on the same day publicly felicitate the petitioners and campaigners in the deal – politician Vasudeva Nanayakkara and Nihal Sri Ameresekere.

The ‘silence is stunning’, one stockmarket analysts said as senior management of John Keells continued to remain quiet following the ruling on the illegal and improper privatization. Besides an initial statement saying the company was studying the judgement, JKH shareholders are also wondering why they have not been informed of any other obligations the company has to fulfill regarding the judgement apart from the tax liability. JKH Chairman Susantha Ratnayake was unavailable for comment.

A leading corporate lawyer told The Sunday Times FT that the only obligation for JKH is to hand over the 8-acre land located in Bloemendhal Road within one month. As for the back taxes the company is obligated to pay retrospective from 2002, the judgement stated that the agreement entered into with the Board of Investment (BOI) which entitled JKH to certain tax free concessions is not valid. The judgement has now been referred to Inland Revenue and it is in their hands to carry out an assessment for which no time limit can be imposed.

Following the return of the land, market analysts say several questions then arise about whether LMSL's on-shore bunkering operations can be carried out without the land assuming that it has storage tanks and pipelines which are necessary to carry out LMSL's core business.

Analysts speculated that JKH will most likely try to negotiate a fresh long term lease from the new owner of the land, either the government of Sri Lanka or the Sri Lanka Ports Authority. However other players, both government and private, may also be interested in bidding for the land. In the absence of being able to lease out the land, LMS will most likely have to consider other options on whether the on-shore facilities can be relocated quickly or whether off-shore bunkering is a viable option. Market analysts are saying that the Colombo Stock Exchange will probably give JKH some leeway since the company is probably evaluating these options prior to releasing a further statement. Analysts further noted that JKH's 1Q09 interim results are 'conspicuously late' as it is usually amongst the early reporters.