Anti-competitor games, state red tape stops FDI
Suspected anti-competitor tactics in Sri Lanka’s lubricant industry and bureaucratic red tape are attempting to stop a large foreign investment, the Business Times learns. Malaysian based local subsidiary, Hyrax Oil’s brand new blending plant hasn’t been granted the necessary approvals to start operations owing to certain vested interests by other industry leaders working together with state officials, informed industry sources told the Business Times.
Hyrax Oil which has been in business since 2007 had signed up to start a blending plant worth US$15 million on a 5-acre land leased from the Ceylon Petroleum Corporation (CPC) at Muthurajawela. In 2016, the Cabinet Committee on Economic Management (CCEM) granted approval for this plant along with the Attorney’s General’s nod. This facility has an annual 44,000 Metric Tonnes (MT) capacity catering to Hyrax’s African, Maldives, Bangladesh and Pakistan markets.
The estimated price reduction in lubricants for the state with this plant is 30 per cent, industry sources say. With this plant competitors’ pricing will get hit, they opine. And they say that now after building the plant and doing all things according to the book, Hyrax hasn’t been issued a ‘blending licence’ to start their operations. This is called ‘Blending, Import and Export Licence’ and is issued by the Ministry of Petroleum. It hasn’t been issued for some four months after the plant was built. Sources say this state-of-the-art plant is idling with Hyrax paying Rs. 5.6 million rental for the land to the CPC. Attempts at contacting Hyrax officials and the Ministry of Petroleum Resources Development on this issue weren’t fruitful .