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Saturday October 23rd, 2021
Economy

Sri Lanka can’t develop Trinco oil tanks without India as per 1987 accord: Minister

ECONOMYNEXT – Sri Lanka can only develop its 100 oil tanks in Trincomalee with Indian support as per the Indo-Lanka accord signed in 1987, Energy Minister Udaya Gammanpila said.

Even after a 35-year lease deal with the state-run Indian Oil Corporation (IOC) ends in 2038, the island nation will still have to develop the tanks with India and India only, Gammanpila told parliament on Monday (04).

Responding to speculation that Sri Lanka was going to sell all the oil tanks to India, the minister said there was nothing to be given.

“There is not even a modicum of truth about what is reported everywhere,” he said.

“There is no truth to the reports that Indian foreign secretary met me or that I went with him in a helicopter. In fact, the Indian foreign secretary hasn’t even asked for an appointment.”

“Even after the current 35-year agreement ends in 2038, we cannot go with any other investor. We have to go only with India as per the 1987 accord,”  he added.

In 2003, Lanka IOC – a subsidiary of Indian State-owned IOC – bought a one-third share in Ceylon Petroleum Storage Terminals Ltd., which operates the Trincomalee’s China Bay tank farm.

The CPC entered into a deal with Lanka IOC to grant a long-term lease to the Indian firm for operating 32 of the 99 storage tanks at Trincomalee for 35 years, for an annual fee of 100,000 US dollars.
However, Lanka IOC has now refurbished and used only 15 tanks out of the 99 including one tank that was damaged.

The 35-year lease finalisation dragged on for years, with trade unions and different factions of society opposed to the move and questioning gvernment plans for the 100 storage tanks, each with a capacity of 12,100 tons.

“All tanks have been given to India under the 2003 agreement. I am only trying to get back some of the unused tanks for Sri Lanka’s use,” Gammanpila said.

Indian diplomats in the past have said discussions have taken place to refurbish and use at least another 10 tanks under a joint venture between the two countries, but discussions dragged due to lack of financial commitment from the Sri Lankan side. (Colombo/Oct04/2021)

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