Compensation must be paid for damaged gas tanks: lawmaker

The China Post staff

Legislator Hsieh Chang-chieh of the People First Party (PFP) yesterday charged that the new government has bent the rules to protect Mitsubishi Heavy Industries of Japan from paying compensation for construction projects involving three giant natural gas storage tanks that were found to have cracks and may pose severe threats to public safety. Lawmaker Hsieh said Mitsubishi won a NT$9 billion contract to build three giant storage tanks with total storage capacity of 130,000 kiloliters of natural gas in Kaohsiung for the state-owned Chinese Petroleum Corp. (CPC) in late 1991.

Although CPC already paid Mitsubishi over NT$7 billion, it refuses to honor the remaining payment on grounds that two of the tanks were found to be leaking after construction work was completed in 1996. Mitsubishi has repeatedly declined to make necessary repairs as demanded by CPC over the past four years. CPC has filed a lawsuit against Mitsubishi and demands compensation of NT$12.8 billion as the two tanks with flaws have remained idle for five years. Lawmaker Hsieh said when CPC and Mitsubishi were still engaged in a court battle, officials of the Council of Labor Affairs (CLA) took unilateral action notifying the court on Dec. 14, of last year that “the gas leakage is allowable” after they conducted an inspection. Hsieh said the possible leakage of natural gas poses grave threats to the lives and properties of people living in the area. He said CLA officials should immediately retract the statement to the court that favors the Japanese contractor at the expense of people in Kaohsiung and the government-owned CPC. He said Mitsubishi has been actively preparing to bid for the liquefied petroleum gas storage facilities at the Tatang power plant currently being constructed by Taiwan Power Co., another state enterprises, while some other foreign companies like General Electric of the U.S. and Siemens of Germany are losing interest and patience in the bidding process for the new project. The United Evening News (UEN) reported yesterday that CPC chairman Chen Chao-wei has recently reported to President Chen Shui-bian about Mitsubishi’s failure to honor its commitment to the two storage tanks with defects in Kaohsiung. CPC is also planning to publicize the Mitsubishi’s failure to abide by the contracts and safety standards for the gas tanks at a government Web site concerning government procurement projects. If this is the case, Mitsubishi will be prohibited from taking part in bidding for other government projects. However, the BEN reported that Economics Minister Lin Hsin-yi and other officials as well as legislators of the ruling Democratic Progressive Party (DPP) have intervened and engaged in lobbying efforts in favor of Mitsubishi. They said the negative publicity about Mitsubishi could tarnish the company’s image and affect the price of its stocks. The evening daily said Economics Minister Lin, who is thought to maintain close relationship with Mitsubishi, had met with CPC chairman Chen over the case, but the two couldn’t reach a consensus on the dispute. Legislator Hsieh of the PFP said that the previous government under the Kuomintang backed CPC’s plan to go after Mitsubishi. However, Hsieh criticized that CLA officials have relinquished sovereignty rights to demand compensation from Mitsubishi since the ruling DPP came to power. About 10 days ago, the UEN said, CPC’s Chen took the case to President Chen Shui-bian, who ruled that public safety should be given the top consideration in the case.