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THE DISMANTLING OF NP by Gerry Kangalee

posted 4 Sep 2013, 20:30 by Gerry Kangalee   [ updated 4 Sep 2013, 20:40 ]

Cecil Paul raises the question: What Is NP Up To? He did so in the aftermath of the suspension of eighty one workers by the state-owned company’s management (six more workers were suspended after Paul wrote the article).
 
He queried “Are the Board and Management of T&T National Petroleum Marketing Company Ltd. provoking the workers to institute large-scale retrenchment and preparing the company for privatization?”
 
This statement led me to look at sources in the public domain to test whether Cecil’s concerns are legitimate.
 
Jobs at National Petroleum Marketing Company Ltd. (NP), a fully state-owned enterprise have been shrinking over the years from close to 400 in the 1ate 1990’s to less than 200 today.
 
 
According to its web site, state-owned, Trinidad & Tobago National Petroleum Marketing Company Limited (NP) was formed in 1972 when the government, under pressure from the labour movement and with foreign transnationals like BP and Shell threatening to pull up shop, purchased BP’s assets. 
 
The next year, the government purchased 50 % of ESSO’s inland market, adding to NP’s assets. In 1976 NP acquired monopoly status in the fuel distribution market. That same year it acquired the marketing assets of Trintoc, which Trintoc inherited from Shell. NP finally acquired Texaco’s marketing assets.
 
NP inherited a lube oil plant from Trintoc. Located at Sea Lots, it produces a range of lubricants under the brand name Ultra and controls 50% of the local lubricants market According to its website: “NP is the primary marketer of motor gasolene in Trinidad and Tobago. It is supplied exclusively by Petrotrin, and sold through the 160-odd operating service stations and fishing co-operatives, of which 60% are located on premises owned or leased by NP, and 40% on the property owned or leased by dealers.”
 
NP operates ten CNG outlets throughout Trinidad. It is the sole supplier of aviation fuel at Piarco International Airport in Trinidad and Crown Point Airport in Tobago. NP is the sole distributor of Liquefied Petroleum Gas (LPG), again Petrotrin is their supplier. Natpet Investments Limited, a subsidiary of NP, operates a semi-automated LPG bottle filling facility at Sea Lots. Natpet also supplies drums specifically for the Pan tuning industry. NP has even set up business in Dominica distributing gasoline and aviation fuel
 
The centrepiece of NP’s operations is the distribution of fuels, gasoline, diesel and aviation fuels. How this operates is that the fuels are manufactured by Petrotrin. The marketing and distribution of these fuels is undertaken by NP.
 
Fuel is transported by barge from the Pointe-A- Pierre waterfront to Sea Lots where NP has a twenty two acre bulk storage facility. Fuel is also dispensed through gantries at Pointe A Pierre, Sea Lots and Tobago. This involves the filling of the road tank wagons which distribute super and premium gasoline, diesel and aviation fuel to the network of service stations and to the Piarco storage facility.
 
NP’s website claims a 70%/30% split between NP and tank wagon contractors in terms of units on the road, but the very website also claims that NP’s fleet accounts for 50% of deliveries to the service station network.
 
Once upon a time, NP owned the barges that hauled the fuels, but they have gone the way of all flesh and are now snugly in the grip of contractors. Of course, permanent workers were retrenched.
 
The future of the lube oil plant which NP has operated since 1976 is now cloudy. In the wake of the signing of an energy agreement by T&T and Panama, NP and the Panamanian firm International Trading Services Ltd. were due to complete a feasibility study in August on the establishment of a Lube Oil Blending Plant in Panama. There are also rumours that the Lube Oil plant may be closed and outsourced to the Shell plant at Point Lisas.
 
NP is getting rid of its gas stations that were operated by NP-hired managers and are handing them over to favoured dealers under a new franchise model that NP claims is renowned for providing benefits to the franchisees, franchisors and the customers”.
 
Customers may be forgiven for scratching their heads in puzzlement as to what benefits they are supposed to enjoy with the popping up of gas station millionaires all over the place. The new franchise system put in place by NP is, of course, skewed in favour of the best “sons and daughters” of the People’s Partnership. More millionaires are being created with public funds. Once more the state is being revealed as an instrument for the accumulation of capital by political financiers and friends of politicians.
 
Outsourcing has been taking place in the Finance Department of NP. The processing of Management salaries is no longer done in-house. This may be a pilot project which may lead to more widespread outsourcing of accounting and clerical functions.
 
It is clear that over the years the functions which NP has carried out have been privatised piecemeal and with
the probable shut down of the Lube Oil plant, the shift to the franchise model of service station operations and the outsourcing of certain accounting functions the trend is being accelerated.
 
 
 
The clincher is the Liquid Fuels Pipeline project.
 
According to the State Enterprise Investment Programme (SEIP) 2013, the Liquid Fuel Pipeline Project is the “construction of an 8” diameter steel multiproduct pipeline from Point-a-Pierre to Caroni and the construction of a road tank wagon loading facility at eTecK’s Industrial Estate in Caroni. Construction is dedicated to a Jet Fuel Pipeline from Caroni to Piarco Airport.”

 

 
This project has absolutely no input from NP, yet it is going to rip the heart out of NP’s operations. The project is being executed by the National Gas Company (NGC) acting as the agent of the government of Trinidad and Tobago. According to the SEIP : “This project is treated as a receivable in the books of the NGC as the project is funded by the Government of the Republic of Trinidad and Tobago (GORTT) from which monies expended are claimed on a monthly basis from the Ministry of Energy and Energy Affairs.”
 
 
What is this project about and how is it going to affect NP? According to the NGC website: “The Liquid Fuels Pipeline is designed to transport 1.6 million gallons or 42,000 barrels per day of refined distillates, specifically two types of gasoline, diesel and jet fuel.”
 
According to the Energy and Infrastructure website: “The multifuel pipeline uses a new technology that
eliminates the use of a ‘pig’ device, which typically is employed to separate products in a pipeline to prevent cross-contamination.  Instead, this new direct product interface transportation pipeline will operate without ‘pigs.’”
 
Wade Hamilton, Vice President of Technical Services, NGC, said: “What we have done with this state-of-the-art control system is that we are able to load one product behind the other without using the ‘pig’ device. So you have a continuous flow of product in the pipeline and a small mixed product interface between various grades of product. Because we can keep the product continuously flowing, there is little mixing between the interfaces…This is all done electronically, saving significant manpower, time and cost…”
 
According to the Digital Refining website: “The preliminary batch sequence would be as follows: Jet A-1 → Diesel → RON 92 → RON 95 → RON 92 → Jet A-1. Before transferring to the Caroni facility’s storage tanks, all the fuels will be metered at a metering skid entering the pipeline. The meter will be used to control the mainline pumps, while the tank gauging systems will be used for custody transfer…”
 
When a batch arrives at Caroni the operator will direct it to the appropriate tank based on the interface detection. “For batch interface detection…Two densitometers are used to detect the interface of the multi-fuels. The first interface detector is installed 4.4 km from the Caroni facility to alert the operator about the product coming in the pipeline.
 
The operator may use a second interface detector, located at the Caroni…to decide the correct time to switch valves to transfer the product into an appropriate tank…When the multi-fuels are transferred using one pipeline, an interface mixture is generated. The interface mixture/off-spec product can be diverted to slop tanks or to the lower-quality product tank. Two slop tanks are provided to accommodate the interface…Fuel from the individual storage tanks is transferred to (truck) loading bays using individual transfer pumps for each product.
 
 
For the batch control of premium and super gasoline: “their physical properties would be too close to reliably differentiate the products based on density alone. Optical interface detectors (OIDs) are also installed near to the densitometers. The two gasoline grades are dyed for taxation purposes, resulting in distinct 
optical signatures (primarily colour), which the OID can distinguish and signal to the operator.”
 

The final word should be had by Kendal Lindsay who is the Assistant Project Manager for the Liquid Fuel Pipeline Project of the NGC. In an interview with Felipe Noguera on the NGC-sponsored Making a Difference, Lindsay said: “the system is designed really to replace the ships, the tankers that carry fuel currently from Petrotrin in Pointe a Pierre to NP in Sea Lots…The whole system starts at Pointe a Pierre where we have four tanks down there and the fuel is shipped by underground pipeline to Caroni.

 
At Caroni …There are nine storage tanks for different fuels, jet fuels, the two gasolines, which we know as super and premium, and diesel. That Caroni facility has a seven-day supply for uninterrupted deliveries during a national emergency…The Sea Lots Facility is a fairly old facility.
 
I believe it has three dispensing stations, what we call RTW loading racks. Those dispensing stations right now, they can turnaround trucks, that is the RTW trucks, in about 40 minutes. The new facility will cut that time in half. In addition, the new facility has 14 stations, so it can load more trucks and each truck can load in a shorter time. So we expect to turn around 14 trucks in about 20 minutes...
 
…At the Sea Lots facility there are operators who load the trucks that belong to NP, NP operators. At the new facility, the truck drivers will be loading the trucks themselves…From Caroni there’s another underground pipeline that goes to Piarco carrying jet fuel only and that terminates in the current NP terminal at Piarco for jet service. So that the RTWs, road tank wagons that carry fuel from Petrotrin to Piarco... will become obsolete ….
 
When will the Caroni facility be ready and how much is it costing the citizens of this country? The Ministry of Energy claimed on its website: “Work began on the project in December 2007 and as at August 31st 2009… reached 68% completion. The project is forecasted to be complete in September/October 2010 at an estimated total cost of TT$739 million.” The project has not yet been completed three years after forecast!
 
Wade Hamilton of NGC claimed: “Construction of the pipeline began in January 2009 and was completed in April 2010. The terminal facility is scheduled for completion in June 2011.”  His start-up and forecasted end date is different from the Ministry’s. But we are still more than two years behind his forecasted date. The SEIP 2013, which was published as a support document for the 2012-2013 budget claims: “This project is 95% complete. The estimated cost was revised from $597.0 million to $832.3 million.”
 
Take your pick of the figures and the start-up and completion dates. This is T&T and contradictory information is par for the course. Given all that has been revealed, it is quite clear now that the days of Sea Lots as a storage facility are numbered; the days of Sea Lots and Pointe-A-Pierre as gas, diesel and aviation fuel dispensing centres are also numbered.
 
It is logical to assume that that the road tank wagons are going to be more and more controlled by contractors. It is also not beyond the realms of possibility that the Caroni facility, when completed, will be handed over to some private company (which is the mantra of the government as dictated by international
capital) which has nothing to do with NP and most importantly, which will have a minuscule workforce, when compared to what exists at NP and which will not be a unionised workforce.
 
While we, in the trade union movement, talk and talk about privatisation; how we are against it and how we are going to fight it, another one bites the dust: jobs are lost and the unionised workforce keeps shrinking. Who next? Home Mortgage/TTMF? Petrotrin? MTS? Sanitation functions in the municipalities? WASA?

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