ECONOMYNEXT – Sri Lanka will likely sign an agreement with India next week to share an oil tank farm in Trincomallee with Lanka IOC, a subsidiary of the state-owned Indian Oil Corporation, following cabinet nod, Energy Minister Udaya Gammanpila said.
Gammanipla told reporters at the weekly cabinet press briefing on Tuesday (04) that cabinet approval for the agreement was obtained Monday night and a date for the singing will be decided soon.
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The minister said that a majority of the 99 tanks will be in Sri Lanka’s control, with 24 under the direct control of the state-run Ceylon Petroleum Corporation (CPC), and the remaining 61 to be brought under a Trinco Petroleum Terminal Ltd which will be a subsidiary of the CPC.
The CPC will have a 51 percent controlling stake in the company, with Lanka IOC owning the remaining 49 percent. Gammanpila said the chairman of the company, as well as four out of its seven board members will all be appointed by the CPC.
The company will be subject to government scrutiny and can be questioned by parliament committees, he said.
“It will be very much part of the state machinery,” he said
India was given the tanks for India’s use in 2003 under the then United National Party (UNP) government of Prime Minister Ranil Wickremesinghe through a memorandum of understanding for 35 years.
Gammanpila said that, as a result of the agreement, 75 of the 99 tanks will effectively come under government control for 34 years.
The Trincomalee oil tank farm was built by the British during World War II as a refuelling station, located in ‘China Bay’ in close proximity to the internationally coveted deep water natural harbour of Trincomalee.
On December 26, the Chennai-based The Hindu newspaper reported citing diplomatic sources that New Delhi’s nod for the emergency Lines of Credit and currency swap requests from economically battered Colombo was contingent on the Rajapaksa administration moving forward on the tank farm deal.
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(Colombo/Jan04/2021)