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  • Home
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  • DAILY CURRENT AFFAIRS:Sri Lanka Cabinet clears Trincomalee oil tank farm deal with India

Sri Lanka Cabinet clears Trincomalee oil tank farm deal with India

Tags: International News

President Gotabaya Rajapaksa’s government in Colombo has approved a proposed deal with India to develop and modernize most of its strategic petroleum storehouses from the World-War-II-era in Trincomalee on the north-east coast of the island nation. 

  • The pre-WWII era oil storage facility covers an area of 850 acres and has a capacity of nearly 1 million tonnes, which far outstrips the demand in Sri Lanka. Trincomalee is also the nearest port to Chennai and can be used for developing it as a refueling facility for small ships.
  • The Sri Lankan Cabinet of Ministers approved the proposal to allocate 14 oil tanks of the Lower Oil Tank Complex already in use by the Lanka Indian Oil Corporation, a subsidiary of the Indian Oil Corporation, for the company's business activities. 
  • It also approved the allocation of the 61 tanks to joint venture company, Trinco Petroleum Terminal Private Limited, with 51% stakes to be owned by the Ceylon Petroleum Corporation and 49% by the Lanka IOC. The arrangement is for the next 50 years.
  • Talks were being held intermittently since the agreement between then Prime Minister Rajiv Gandhi and Sri Lankan President J R Jayewarndene as part of the annexure to the India-Sri Lanka Accord of July 29, 1987 — that the tank farm would be developed jointly.
  • India was initially reluctant to heavily invest in Trincomalee. India's interest in Trincomalee got boosted after China heavily invested in Hambantota port.

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