CPSTL profitability improved despite pandemic: Chairman

Chairman of Ceylon Petroleum Storage Terminal Ltd (CPSTL) M. Uvais Mohamed, in an interview with Daily Mirror explains how the financial situation of his organization improved in the recent past. Excerpts of the interview: 

Amidst COVID challenges how has CPSTL performance been?
It has been a challenging year for the organization. In 2019, we made a bottom line of Rs. 1.6 billion. Unfortunately,

with the Covid-19 outbreak revenue dipped 12 percent, impacted by a 20 percent decline in overall volumes. 
However, after brainstorming with our management team, I am happy to say, with some prudent cost saving measures we managed to end up profitable posting Rs.  2.1 billion for the year. 

A few measures adopted include the curtailment of personnel cost. It has not been an easy task when it comes to mitigating personnel expenditure, especially in an organization that houses a large worker base. 

However, with the cooperation of all employees we were able to reduce personnel cost by 7 percent in a very challenging year. 

Transport cost was another key factor. The overall transport cost was reduced by 10 percent by increasing fuel transportation by rail from 25 percent to 38 percent. 

This was managed by navigating certain strategic transport routes. For an example we used to transport by road fuel to the depot in Kankesanthurai (KKS). 

Now we send by rail directly to Vavuniya and from there it is supplied to KKS, saving time and money. Likewise certain re- routing was carried out, with one such being the supply directly from Kolonnawa to Ambalangoda instead of first to Galle and from there to Ambalangoda. 

What are the other measures taken to increase rail transport?
Rail network within our premises remain dilapidated.  We cannot get total efficiency as a result.  The network had been built during the colonial period.  

We have decided to construct another rail track using the expertise of Sri Lankan Railway. That is within the premises.  This as a result will reduce traffic and impact on the economy while improving efficiency. This will be done with an investment of 
Rs. 100 million.

Initial discussions were also held with the leadership of the Transport Minister Gamini Lokuge, Energy Minister Udaya Gammanpila, between CGR and CPSTL, to allocate extra railway engines to transport fuel bogies. By doing this, we would be able to efficiently use off peak hours for transportation. 

Pipeline leakages are used to be a burden to the corporation and to the country. Have you taken any measures to rectify this after your appointment? 
Most of the pipelines are between 45 and 75 years old. There are five pipelines transporting fuel from the Colombo Harbour to Kollonnawa.

In 2019, one twelve inch pipeline was newly constructed. We have got board approval to rehabilitate a fourteen inch black line which is forty years old at a cost of Rs. 100 million. We also have planned with the guidance of Minister Gammanpila another two new lines (14 and 18 inch lines) to replace the older ones. With the installation of these two lines we are hoping there would be no problems such as this for another twenty five years. Both these lines were planned to be done using in-house engineers. 

All these measures will mitigate disruptions to the energy sector in the future.