Eureka!! Our Energy Minister has given a heroic explanation on TV; that he has managed to regain the ownership or possession of the Trincomalee (Trinco) Oil Tank farm and intends giving 24 tanks to the Ceylon Petroleum Corporation (CPC), extends the ‘purported 35 year lease” (said to be ending in 2038) of 14 tanks to [...]

Business Times

Don’t sell the Trinco Oil Tank Farm


Eureka!! Our Energy Minister has given a heroic explanation on TV; that he has managed to regain the ownership or possession of the Trincomalee (Trinco) Oil Tank farm and intends giving 24 tanks to the Ceylon Petroleum Corporation (CPC), extends the ‘purported 35 year lease” (said to be ending in 2038) of 14 tanks to Lanka IOC (LIOC) for another 50 years and giving 61 tanks to a joint venture company formed with CPC having 51 per cent and LIOC 49 per cent for new business development.

But he hides facts when he says that the 1987 Indo Lanka Accord, Sri Lanka has agreed to develop Trinco Tank farm jointly with India and in 2003 the UNP Government has signed an agreement leasing the entire tank farm to LIOC. Misleading the entire country with a beaming smile he keeps whitewashing an absolute farce and a national crime of selling an important national asset to Indians in the prevailing dollar crunch created by our own so-called patriotic leaders.

The Trinco Tank farm with 102 steel riveted petroleum tanks located in an area spanning 850 acres of prime land adjacent to one of the best natural deep-water harbours in the world with the dedicated oil jetty connected to the tank farm, need not be given to any other country or any foreign company irrespective of any agreement already said to have been signed with LIOC or any other party.

It is imperative that all tanks are held back immediately in government possession and government control before doing any business development.

Despite the arguably unbeneficial way it was done, if the Sirimavo Government in the 1960s with a simple majority had the sovereign will to send away all 5 oil majors from this country; what stops the sovereignty of the present government with complete executive powers of the President enjoying the will of the people to take full control of our own asset (tank farm) which by no legal agreement has ever been given to any party.

The Committee of Public Enterprises (COPE) findings indicate that there was no legal agreement whatsoever signed in order to lease the aforesaid tanks out to LIOC. The annual US$100,000 or $8333.33 per month lease for all 100 tanks on 850 acres is not worth by any standards given the unprecedented value of the asset in question. Similarly, what is mentioned in the annexure of the Indo Lanka accord is no more than a consideration of development of the tanks jointly with India which is nowhere near a semblance of a legal agreement.

Developing 100 tanks and clearing the 850 acres of land and renovating the pipe line and the oil jetty should be done and owned by the Sri Lanka government so that the tanks are only hired out on a daily rate “per CBM per day”; for storage for any party requiring to hire them for crude oil, heavy fuel oil, intermediate fuel oil, refined products such as diesel, petrol, kerosene, aviation fuel etc using dedicated tanks and separate pipelines to the jetty.

SL should manage

It will cost an affordable amount to the Sri Lanka government needing no loan involvements to clear our own backyard of 850 acres. Management of that operation shall be done by the government-owned or delegated company with corporate efficiency. They can also canvass for business to attract foreign companies to use the tanks for short term and long term storage of petroleum oil only on the basis of ‘per CBM per day rate’ so that there is no question of long term leasing it out to anybody.

It must be further reiterated that there is no need to get into another trap like Hambantota when the Trinco harbour, tanks pipelines and jetty and land are already ours without a cent of debt to anyone like in the case of Hambantota then.

We must make full use of our own asset for the country’s benefit. I hope the government has learnt the lesson the hard way from the Hambantota Port experience which was built with borrowed $1800 million cash from China when that money could have been easily used for developing all three container terminals at the Colombo South Harbour; East, South and West Container Terminals at a cost of $400 million each or $1200 million in all and earning enough dollars for this country since a decade ago servicing that loan, without losing half of the Colombo Port’s business to foreigners and ending up a lifetime lease of Hambantota Port losing not only the port but also our own land with it.

Biggest mistake

Finally not only are  we back to square one but with minus a port, minus money and minus land; the biggest political mistake ever made in the history of this country. That also clearly leads to not only “no return on investment” but also undue geo-political pressure which is now coming around to Trinco. At least this time, can the Sri Lankan politicians stop giving away national assets like the Trinco tanks to Indians or any other on any condition of sale or lease?

The Sri Lankan public shall challenge any expert in the industry or the government to irrefutably justify:  

  •     Why the Trinco tanks should be jointly developed with India or any other country?
  •     Why can’t the government have a joint venture with Sri Lankan companies?
  •     Whether it costs an unaffordable amount to develop the tank farm?
  •     Whether we intend buying and selling oil or look to offer the tanks for storage only?
  •     What is LIOC doing with 99 tanks when there is no valid agreement with them to lease?
  •     Why can’t the government totally cancel or remove the unwritten agreements to lease the tanks to LIOC?

Politicians shouldn’t be allowed to sell this national asset.


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