ECONOMYNEX – Sri Lanka hopes to sign a long-dragging deal with India in January 2022 to jointly develop oil tank farms in the Eastern district of Trincomalee, The Hindu reported on Sunday (26) quoting Energy Minister Udaya Gammanpila.
“We have been negotiating this for 16 months, and we are now very close to finalising the terms of the Trincomalee project with India. We hope to sign the agreement in a month,” Gammanpila told The Hindu on Sunday.
According theto Chennai-based newspaper, the Minister has instructed the Ceylon Petroleum Corporation (CPC) to form a subsidiary company, Trinco Petroleum Terminal Ltd., for the purpose.
The move follows President Gotabaya Rajapaksa’s nod to setting up the special purpose vehicle ahead of the next Cabinet meeting, The Hindu reported.
“We don’t have a cabinet meeting this week because of the holidays. We will get the decision ratified in the next one,” Gammanpila was quoted as saying.
In October this year, Gammanpila told parliament that Sri Lanka can only develop its 100 oil tanks in Trincomalee with Indian support as per the Indo-Lanka accord signed in 1987.
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 said on October 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.”
The 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.
Citing diplomatic sources, The Hindu reported that New Delhi’s nod for the emergency Lines of Credit and currency swap requests from Colombo was contingent on the Rajapaksa administration moving forward on the Trincomalee deal.
Gammanpila, however, has dismissed the idea.
“Some including the political opposition are suggesting that India’s economic assistance is tied to the Trincomalee deal. I vehemently deny that. We began negotiating this agreement well before the economic assistance was sought,” insisting “there is no connection whatsoever,” the newspaper quoted him as saying. (Colombo/Dec27/2021)