STC likely to be dismantled

The government has initiated the first step leading to the dismantling of the State Trading Corporation (STC) by 2014. This was stated by a reliable source of information.

Thus, the cabinet has granted the STC permission to go ahead with the construction of three fuel tanks in the zone of the port. Moreover, two pipelines will also be implemented as part of the project.

The objective is to set-up the necessary infrastructure before a private petrol company can start activities to look after the import of petrol products. This will be supported by Shell and Total.

The possibility of a three-way partnership has already been discussed by the Competition Commission Mauritius (CCM). According to information available, the CCM will not oppose the business venture.

The liberalisation of the cement market with Binani cement ltd starting activities and also the MCFI-ETA, is another indication that the government is gradually trying to reduce the reach of STC.

The parastatal body was founded in October 1982 and it ensures the import of products such as LPG, rice, flour, pulses and cement. The financial management of STC was severely criticised for the hedging contract signed in 2008 under the provision of exit clauses.

It also made headlines following a parliamentary question by Mouvement Militant Mauricien MP Kee Chong Li Kwong Wing.

The total losses incurred by the STC due to the hedging exercise ordered by general manager Ranjit Samrooah in tandem with Rajesh Jeetah as minister of Industry and Commerce are estimated to be around Rs 5 billion, including Rs 234 million as bank interests.

Till date, the STC has not paid loans taken from local banks. Some Rs 1.2 billion will be paid by 2012.