Business

Sri Lanka, India to jointly develop Trincomalee oil tank farm

India and Sri Lanka have in principle agreed to jointly operate the world war-era oil storage facility in Trincomalee, the strategically advantaged port town located on the island’s east coast.

“We are currently negotiating the specifics of the joint venture,” Sri Lanka’s Petroleum Minister Chandima Weerakkody told The Hindu on Saturday.

At present Indian Oil Corporation subsidiary Lanka IOC, engaged in bunkering operations, runs 15 out of the 99 storage tanks in the lower oil tank farm in Trincomalee. The proposed joint venture pertains to the remaining 84 tanks in the upper farm, but Sri Lanka would retain 10 of those for use by the Ceylon Petroleum Corporation, the Minister said. Most of the tanks -- built by the British during the World War Years -- are in good condition, he added.

During his visit to Sri Lanka in March 2015, Prime Minister Narendra Modi said the project to develop the upper tank farm in Trincomalee would help the coastal town become a regional petroleum hub.

Home to 3.7 lakh Muslim, Tamil and Sinhala people Trincomalee, in Sri Lanka's post-war years, has emerged a favoured destination for surfers from around the world, gradually transforming with plush resorts and restaurants dotting its coast.

At the same time, with its fine natural harbour and crucial location, Trincomalee remains in spotlight as a potential transit point for international trade routes, particularly drawing India which has known strategic interests there.

India has been engaging with Sri Lanka since 2003, almost 15 years after the 1987 Indo-Sri Lanka Accord granted first preference to India in the running of the oil storage facility. As per the 2003 agreement signed by the neighbours, India was to upgrade and commission the 99 tanks in the farm – each with a capacity of 12,250 kilolitres – on a 35-year lease. However, the project did not take off fully as planned, as the two sides could not come to an understanding on operational aspects.

Following Mr. Modi’s visit to Sri Lanka two years ago, the two countries renewed discussions and are hoping to firm up the deal before the Indian Prime Minister’s scheduled second official visit to the island in early May.

Even Sri Lanka did not retrieve the bay from the British without difficulty, according to Mr. Weerakkody. “It was held by them [the British] until 1958, for ten years after Independence. Former Prime Minister SWRD Bandaranaike paid £2,37,000 to them to get the farm bank.”

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Printable version | Sep 27, 2020 6:37:19 PM | https://www.thehindu.com/business/sri-lanka-india-to-jointly-develop-trincomalee-oil-tank-farm/article17893989.ece

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