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Monday April 15th, 2024

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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Sri Lanka to discuss two contentious points with bondholders: report

ECONOMYNEXT – Sri Lanka and sovereign bondholders are to discuss two matters in the near future which the two sides failed to reach agreement at March talks in London, a media report quoting a top aide to President Wickremesinghe as saying.

Sri Lanka and bondholders had discussed four matters on restructuring international sovereign bonds in late March and agreement had been reached on two, President’s Chief of Staff Sagala Ratnayake was quoted as saying on state-run ITN television.

A restructuring proposal by bondholders was not in line with IMF requirements, and Sri Lanka had sent a counter proposal, he said.

The matters will be discussed at round of talks in the near future.

Sri Lanka was optimistic of reaching an agreement with the bondholders before June, officials have said.

According to matters already in the public domain, sovereign bond holders are keen to get a bond tied to dollar gross domestic product, as they feel IMF growth projections are too low.

In past re-structuring so-called value recovery instruments, a type of warrant, gave their owners extra payments if a country did better than expected and were tied to items like oil prices.

Bondholders had initially proposed bond which would have a lower hair cut initially, and it will have additional hair cuts if growth is low (about 3.1 percent) as projected in an IMF debt sustainability analysis. (Colombo/Apr15/2024)

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BIMSTEC Secretary General visits Sri Lanka, discusses regional cooperation

ECONOMYNEXT – The Secretary General of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), discussed measures to enhance regional cooperation, during his visit to the island last week.

Ambassador Indra Mani Pandey, Secretary General of BIMSTEC visited Sri Lanka from 07 – 12 April 2024, following his assumption of office as Secretary General of BIMSTEC in January this year.

The Secretary General “met with senior officials of relevant Ministries/Agencies to discuss measures to enhance regional cooperation under various BIMSTEC initiatives,” the Foreign Ministry said in a statement.

Several BIMSTEC countries have bilateral trade agreements, such as Sri Lanka and India, Thailand and Myanmar, Sri Lanka and Thailand, but no collective regional agreement to enable intra-regional leverage.

During the visit, Secretary General Pandey held discussions with Ministry of Foreign Affairs officials and paid courtesy calls on the President and the Minister of Foreign Affairs.

Secretary General Pandey participated at an event on “Regional Cooperation through BIMSTEC” organized by the Lakshman Kadirgamar Institute (LKI) on 9 April. (Colombo/April15/2024)

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Sri Lanka rupee closes weaker at 299.00/10 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 299.00/10 to the US dollar in the spot forex market on Monday, from 298.50/55 on Wednesday, dealers said, while bond yields were broadly steady.

A bond maturing on 15.12.2026 closed stable at 11.30/35 percent.

A bond maturing on 15.09.2027 closed stable at 11.90/12.00 percent.

A bond maturing on 15.12.2028 closed at 12.10/20 percent up from 12.10/15 percent.

A bond maturing on 15.09.2029 closed stable at 12.20/40 percent. (Colombo/Apr15/2024)

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