The Hindu : Tamil Nadu News : Objections to oil purchase from Reliance `strange'

Online edition of India's National Newspaper
Wednesday, Mar 30, 2005

Tamil Nadu

Tamil Nadu

Objections to oil purchase from Reliance `strange'

By Our Special Correspondent

CHENNAI, MARCH 29. The Minister for Transport and Electricity, R. Viswanathan, today defended the Government's decision to purchase high-speed diesel (HSD) from Reliance Petro Marketing Private Limited (RMPL) for the STC fleet.

Replying to the debate on the demand for grants to the Transport Department, he told the Assembly that the seven State Transport Corporations had entered into an agreement with the Indian Oil Corporation (IOC) and two other corporations for supplying HSD at concessional rates. As per this agreement, which would be in force till March 31, the oil corporations would offer a discount of Rs. 700 a kilolitre. By way of this discount, the State transport undertakings saved Rs. 30 crores from April 2004 to January 2005 on fuel cost.

The STCs entered into an agreement with RMPL for supply of HSD oil for 20 out of their 398 depots at a discount of Rs. 1,300 a kilolitre for six months from April 1 as a trial measure. This would result in additional savings of Rs. 1.23 crores. Efforts were also on to make the public sector oil companies match this discount for six months. Had the Government extended the agreement to all remaining 378 STC depots, it would have earned a profit of Rs. 73 crores.

Referring to the criticism against the agreement with a private sector company, Mr. Viswanathan said those who found fault with the Government's move should understand that efforts were on to reduce the Centre's share in the IOC from 82 to 51 per cent.

`Double standards'

The Minister accused the Dravida Munnetra Kazhagam (DMK) and the Pattali Makkal Katchi (PMK) of adopting double standards.

Though the PMK founder, S. Ramadoss, opposed the agreement, it was during the tenure of his party's nominee in the Union Ministry, E. Ponnusamy, (as Union Minister of State for Petroleum), was Reliance permitted to enter the oil marketing field. It was strange that objections were raised over the agreement even as the STCs purchased buses, tyres and spare parts from private companies.

Further, the Union Communications Ministry headed by the DMK nominee, Dayanidhi Maran, allowed private companies such as Reliance and TATA to spread their telecommunication network, Mr. Viswanathan said.

Though it incurred an additional expenditure of Rs. 185.51 crores in 2004-2005, the Government did not hike the bus fare. He put the outstanding liabilities of the corporations at Rs. 595.62 crores including Rs. 364.28 crores in statutory dues such as provident fund, gratuity and recoveries from employees, as on January 31 due to "continuous losses suffered by them in the earlier years."

The progressive trend established in 2003-2004 was sustained and the STCs were likely to end up with an overall profit of around Rs.14 crores at the end of 2004-2005. As many as 2000 buses would be replaced during 2005-2006.

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