Petroleum pipeline gets delayed again
Officials this week passed the buck over the near year- long delay in awarding a tender to complete the final phase of a crucial fuel pipeline from Colombo Port to the Ceylon Petroleum Storage Terminals Limited ( CPSTL) facility at Kolonnawa.
Petroleum Corporation trade unions warn that failure to complete the pipeline could plunge the country into another fuel shortage should the single, dilapidated channel currently transporting refined diesel, petrol and aviation fuel get damaged.
Repairs to the 12-inch pipeline have been ongoing since 2015. While 80 per cent of work has been finished by the Ceylon Petroleum Corporation, a tender must be awarded for a section to be laid underground, as the CPC lacks the necessary technical expertise for this.
Tenders were first called in February this year. The deadline for submission of bids was extended twice. Eight bidders ultimately submitted bids, but five were rejected at the technical stage. The lowest bidder then ran into a technical issue by quoting prices in the wrong currency. This bidder also asked to increase its fee saying that, as the deadline was twice extended, the earlier offer no longer applied.
Even with the revision, however, this bid was considerably lower than the second lowest in the list. But attempts are reportedly being made to award the tender to the second lowest bidder, alleged D. J. Rajakaruna, Convener of the CPC Trade Union Collective.
If the lowest bidder has the required technical expertise and if the company has adhered to tender procedure, there is no reason why it should not get the tender, Mr. Rajakaruna said. “The CPC and CPSTL management told us they will complete the pipeline by March 2018,” he pointed out. “This won't be possible as the tender is yet to be awarded.”
At present, there is only one 10- inch pipeline transporting refined diesel, petrol and aviation fuel from Colombo Port to Kolonnawa. This pipeline is nearly 80 years old and springs leaks from time to time. “If there is a major leak, the country’s fuel supply will be severely affected,” the trade unionist said. “The impact on aviation fuel in particular will be devastating.”
The delay means that the authorities cannot shut down the Sapugaskanda oil refinery for essential maintenance. It must be kept in operation as the existing 10-inch pipeline cannot transfer fuel at high speed due to its condition. Shutting down the refinery in these circumstances would lead to a fuel shortage. The refinery, therefore, has not been serviced in three years.
But several key officials absolved themselves of responsibility for not awarding the tender. Petroleum Resources Development Ministry Secretary Upali Marasinghe replied via SMS that our question should be directed to CPC and CPSTL Chairman Dhammika Ranatunga. Mr. Ranatunga could not be contacted.
Sanjeewa Wijeratne, CPSTL Managing Director, said the tender process is being handled by the Cabinet Appointed Procurement Committee (CAPC) and not the CPSTL. He also explained that the section for which the tender was due to be awarded required horizontal directional drilling (HDD) with a part of the pipeline being laid about 20 metres below surface.
The line will travel underground along three areas -- from Dolphin Pier to Colombo Harbour; at Mahawatta, where squatters in the vicinity are refusing to leave; and at Orugodawatta, under the rail tracks.
There were “no quick fixes”, Mr. Wijeratne insisted. And the CPSTL’s hands were tied as the tender process was outside its purview. He was hopeful that repairs to the pipeline could be done quickly, so that there would be two pipelines in operation. Then, if one were to fail, the other could be used.
Mr. Wijeratne added that, if upgrades had been done to the pipelines on time over the past 15 to 20 years, the offloading of each 40,000 metric tonne fuel tanker at Colombo Port could be done significantly faster than the seven days it takes at present. (See detailed report in the Sunday Times online edition)