The Indian High Commission in Colombo has rejected Sri Lankan energy minister’s claim that the deal between the two countries on the 99 World War II-era Trincomalee oil tanks leased to the Indian Oil Corporation has been scrapped.
In a statement, the mission said, “there is no truth in reports in some sections of the media that the understanding between India and Sri Lanka on jointly developing and operating the Upper Tank Farm at Trincomalee has been scrapped.”
Energy Minister Udaya Gammanpila announced on Wednesday that Sri Lanka will re-acquire 99 World War II-era oil storage tanks leased to IOC in the eastern port district of Trincomalee.
Gammanpila told a gathering at the Colombo north suburb of Kolonnawa that talks with the Indian High Commissioner in Colombo on this issue concluded last Sunday.
“I am happy to state that the Indian High Commissioner was very flexible at the talks. He ignored the conditions mentioned in the agreement signed in 2017 in order to be helpful to us,” Gammanpila said, referring to his discussions with High Commissioner Gopal Baglay.
The Indian mission said that these reports did not correctly portray remarks made by the minister of energy at an event on February 17, 2021. The minister has himself clarified the matter in detail today through a press briefing.
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, it said.
India looks forward to formal discussions on the matter, and expeditious implementation of their outcome to mutual benefit,” the statement said.
Gammanpila, while clarifying his comments, on Thursday told reporters that tanks will be operated under a Sri Lanka government controlled entity jointly with an Indian partnership.
The Trincomalee Harbour is one of the deepest natural harbours in the world. It was developed by the British during World War II.
These tanks will have the capacity to offer bunkering facilities to the ships sailing in close proximity to Trincomalee, according to reports.
Sri Lanka in 2003 had leased out 99 oil tanks to the IOC for 30 years for an annual payment of USD 100,000.
The IOC was also given one third share of the Sri Lankan government entity, Petroleum Storage Limited. However, the Ceylon Petroleum Corporation (CPC) trade unions had been pressing for the takeover of the tanks.
Initially, the CPC wanted to develop 25 of the tanks by investing USD 25-30 million. The CPC maintains that it will allow them to strengthen their oil storage and distribution in the north and eastern provinces while allowing stock maintenance to suffice 2-3 months.