The Hindu : Kerala News : KRL workers' plea to MPs

Online edition of India's National Newspaper
Wednesday, Jun 09, 2004

Kerala

Kerala

KRL workers' plea to MPs

By Our Staff Reporter

KOCHI, JUNE 8. The Cochin Refineries Workers Association has urged the newly elected MPs from the State to put pressure on the Central Government to review the decision taken by the previous Government on Kochi Refineries Limited (KRL). The Association has circulated a note among the MPs and sought their help to effect a merger of KRL with Oil and Natural Gas Corporation Limited or Indian Oil Corporation Limited (IOCL) instead of the present set up with Bharat Petroleum Corporation Limited (BPCL).

The Government had divested KRL by transferring 56 per cent of the shares held by the Government to BPCL in 2001. This was part of the Government's policy on structural readjustment of stand-alone refineries (companies engaged in petroleum refining only). Consequently, KRL became a subsidiary of BPCL.

Later, the Government unveiled its Hydrocarbon Vision 2025 policy spelling out the measures to be initiated in hydrocarbon exploration, processing and marketing. It also includes the New Licencing & Exploration Policy (NLEP) and the development of new basins for the exploration of hydrocarbon and natural gas after the divestment of the Government's stake holdings in BPCL and HPCL.

The workers point out that the hydrocarbon policy document clearly envisages that after the divestment of the Government's holding in BPCL and HPCL fully, there will be only Indian Oil Corporation Limited, Oil & Natural Gas Corporation Limited and Gas Authority of India Limited under the umbrella of Government of India. These three mega corporations in the hydrocarbon sector may at a later date be merged to form a mega fortune company of India with its presence all over the world as a vertically integrated company engaged in oil exploration, refining, marketing and logistics. At the time of the structural alignment of KRL with BPCL, the former had many ambitious expansion programmes like capacity expansion, a power plant at Ambalamugal and entry into the marketing area. The present financial strength and health of KRL do not permit it to invest huge amounts for refinery modernisation and setting up marketing facilities simultaneously. If KRL alone dare to undertake such capital-intensive expansion programmes through borrowed capital or equity, the result will be another FACT in Kerala, the workers' note says.

Prior to takeover by BPCL, the management of KRL was free to formulate its plans and policies independently under the overall guidance of the Ministry of Petroleum and Natural Gas and at that time, the main consideration was the protection of business interest of KRL in measurable terms and the overall industrial development of the industrially backward State of Kerala. But now BPCL wants to grow and maintain its customers in the southern peninsula at the cost of KRL, the note says.

Since its inception in 1966, KRL has a strong track record and the only solution to safeguard the interests of the KRL is to structurally and strategically realign KRL with either IOCL or ONGC Ltd., according to the workers.

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