Report highlights potential PPP options for loss-making CPC

As Ceylon Petroleum Corporation (CPC) has taken some effort to bring the private sector into the industry, a comprehensive report on the possible opportunities for the loss-making entity highlighted that there are more public-private partnership (PPP) options that can be explored to bring about the much-required efficiency.

Friedrich Naumann Foundation for freedom Sri Lanka (FNF) and JAAR Corporate Solutions, in a freshly launched report on CPC, shared four options the State-owned enterprise (SOE) can opt for to lure more private sector organisations into the industry.

The first of the four options is to have more private participation in fuel import and distribution if the existing fuel storage facilities of CPC can be leased to private investors. The report stated that this may include but is not limited to China Bay tanks that are directly controlled by CPC (24) and jointly controlled by CPC and LIOC.

The second is in the area of ‘Build-Rehabilitate-Operate-Transfer’ (BROT). Given that repairing the existing pipeline from port to storage facilities has been ignored, the report pointed out that an investor would be interested to rehabilitate the facility if provided on BROT bases.

The third option is for CPC to join hands with a management company to manage the entity and its operations as the management thus far has continued to generate losses. The report stated the option will also help CPC avoid political influences and other mismanagement by politically-appointed key personnel, and unqualified managers.

The fourth option for PPP is in the distribution function. In order to enhance the distribution network, PPP models can be introduced and a model like build-own-operate (BOO) is more suitable for investments of this nature, the report noted. 

The CPC distributes petrol, diesel and other domestic items via its fuel station network, and at present, several fuel stations which were owned earlier by the CPC, have been privatised.