Almost after three years of bickering with the Ceylon Petroleum Corporation (CPC), Hyrax Oil Sdn Bhd, a Malaysian oil major is now successfully operating its lubricant oil blending plant in Muthurajawela.
The CPC had entered into 03 agreements on 06 May 2016 with Hyrax Oil Sdn. Bhd of Malaysia to establish a lubricating oil blending plant in Muthurajawela under a Build- Operate-Transfer agreement.
The aim is to supply lubricants to the export market and the local market of Sri Lanka at an affordable price.
The necessary licenses are relevant to the auto deal but those licenses had not been granted even up to 30 June 2018.
Accordingly, there existed the possibility for the company to take legal action against the CPC.
Moreover, the Hyrax Company had sent many a letter and reminder to the Ministry of Petroleum Resources Development as well as the Ceylon Petroleum Corporation in regard to the failure of the CPC to adhere to the Agreement.
The letter of the Attorney General in that connection, dated 23 January 2018 had informed that, in the event of Corporation intending to revise the provisions of the said agreements etc
The 03 agreements relating to that project, namely BOT Agreement, Supply Agreement, and Land Lease Agreement, had been entered into without being fully complied with the opinion of the Attorney General.
The Ministry of Petroleum Resources Development and the Ceylon Petroleum Corporation had halted taking action relating to the establishment of the plant as at 20 June 2018.
They were pointing out that the terms and conditions set out in the said Agreements had comprised matters having an adverse impact on the lubricant industry of the CPC and certain sections had violated the CPC Act and cabinet decisions.
However, Hyrax Oil was selected as the contractor for the project as an unsolicited bid without adhering to the provisions of government procurement guidelines.
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