Trinco oil tank farm: Agreement between Sri Lanka and India remains intact – Indian HC

There is no truth in reports that the understanding between India and Sri Lanka on jointly developing and operating the Upper Tank Farm at Trincomalee has been ‘scrapped’, the Indian High Commission said yesterday in a press release.

This comes a day after Minister of Energy Udaya Gammanpila told reporters in Colombo that the government would reacquire World War-era oil tanks in the eastern city of Trincomalee — which were leased out to an Indian Oil Corporation (IOC) in 2003.

“These reports did not correctly portray remarks made by the Minister of Energy of Sri Lanka at an event on 17 February 2021. As indicated in the Minister’s briefing also, the two governments have consulted each other to explore mutually acceptable modalities for jointly developing and operating the facility in accordance with existing bilateral understandings, including the MoU of 2017,” the HC said.

India looks forward to formal discussions on the matter, and expeditious implementation of their outcome to mutual benefit, the HC said.

The pre-World War 11 era oil storage tanks in Trincomalee would be administered by a State Owned Enterprise and all its activities would be subjected to the state auditing procedures after the government re-acquired the oil tanks from the Indian Oil Corporation (IOC), Minister of Energy Udaya Gammanpila said on Thursday.

Gammanpila said that after they re-acquired the tanks; the government would decide for how long the SoE would administer them, the agreement between shareholders and how many tanks would be handed over to the CPC.

On Wednesday Minister Gammanpila said that during a discussion with the Indian High Commissioner, the Indians agreed to “leave aside” the terms negotiated by the former Maithripala Sirisena – Ranil Wickremesinghe administration in 2017.

In 2003, Sri Lanka leased out 99 oil tanks to IOC for 35 years, for an annual payment of $1,00,000. Lanka IOC has been using 15 tanks, while the rest await an upgrade for use.

In 2017 on development cooperation, India and Sri Lanka agreed to jointly [with LIOC involvement] refurbish 84 tanks and build related infrastructure in the Trincomalee Port. However, the two sides were unable to carryout project, amid mounting pressure from the oil sector trade unions that sought more control for the state-run Ceylon Petroleum Corporation (CPC).