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Please don’t sell our Trincomalee Oil Tank Farm

05 Jan 2022

BY Ranjith Weerasinghe  Eureka! Our Energy Minister Udaya Gammanpila gave a heroic explanation on television, that he had managed to regain the ownership or possession of the Trinco Oil Tank Farm.  He explained that he intends on giving 24 tanks to the Ceylon Petroleum Corporation (CPC), extending the “purported 35-year lease” (said to be ending in 2038) of 14 tanks to the Lanka Indian Oil Corporation (LIOC) for another 50 years, and giving 61 tanks to a joint venture company formed for the purpose, with the CPC having 51% and the LIOC having 49% of the new business development.  He further hid facts when he said that by way of the 1987 Indo-Lanka Accord, Sri Lanka had agreed to develop the Trincomalee Tank Farm jointly with India, and that in 2003, the United National Party (UNP) Government had signed an agreement in leasing the entire Tank Farm to the LIOC. Misleading the entire country with a beaming smile, he kept white washing an absolute farce and a national crime of selling an important national asset to Indians in the prevailing United States dollar (USD) crunch created by our own so-called patriotic leaders. The Trincomalee Oil 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 the LIOC or any other party. It is imperative that all tanks are immediately held in Government possession and cleanly under the Sri Lankan Government control before doing any business development. Despite the arguably unbeneficial way it was done, if Prime Minister Sirimavo Bandaranaike-led Government of the 1960s with the simple majority had the sovereign will to send away all five oil majors from this country; what stops the sovereignty of the present Government with the complete Executive power of the President, enjoying the will of the people, to take full control of our own asset of the Trincomalee Oil Tank Farm, which by no legal agreement had ever been given to any party? The Committee on Public Enterprises (COPE) findings indicate that there was no legal agreement whatsoever signed in order to lease the aforesaid tanks out to the LIOC. The $ 100,000 per annum, or $ 8333.33 per month, lease for all 100 tanks in the 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 the development of the tanks jointly with India, which is nowhere near a semblance of a legal agreement. So, get the LIOC out of their hold on the tanks first, before our Minister shows his 32 teeth across our TV screens. Developing 100 tanks and clearing the 850 acres of land and pipe line casement and the oil jetty in the Trincomalee harbour should be done by the Sri Lankan Government and continue to be owned by the Sri Lankan Government, so that tanks are only hired out on a daily “cubic metre (CBM) per day” rate, 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. It shall cost an affordable amount to the Sri Lankan Government, needing no loan involvements to clear our own backyard of 850 acres. The management of that operation shall be done by a government-owned or delegated company with corporate efficiency. They also can canvas for business to attract foreign companies to use the tanks for the short-term and long-term storage of petroleum oil only on the basis of “CBM per day rate” so that there is no question of the 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, the tanks, pipelines, jetty, and land are already ours without a cent of debt to any one like in the case of Hambantota. Then, why invite another country like India to jointly develop it? We must make full use of our own assets for the country’s benefit.  Hope the Government has learnt the lesson hard way from the Hambantota Port, which was built with borrowed $ 1,800 million from China, when that money could have been easily used for developing all three Container Terminals in the Colombo South Harbour – East, South, and West Container Terminals – at the cost of $ 400 million each, or $ 1,200 million in all, and earning enough USD for this country from a decade ago, servicing that loan, without losing half of the Sri Lanka Ports Authority’s business to foreigners and ending up with a lifetime lease of the Hambantota Port, losing not only the Port but also our own land with it. Finally, not only are we back to square one but also minus a port, money, and land; the biggest political mistake ever made in the history of this country. That also clearly led to not only the no return of investment, but also set off the beginning of the USD crunch in the country and the avalanche of undue geopolitical pressure which is now coming around to Trincomalee. At least this time, can the Sri Lankan politicians stop giving away national assets like the Trincomalee tanks to the Indians or any other on any condition of sale or lease? One must study the reasons for the beginning of Somali sea piracy which had its roots in their rulers’ misuse of power and the sale of national assets. The Sri Lankan public should challenge any expert in the industry or the Government to irrefutably justify the following:
  • Why should the Trincomalee Oil Tank Farm be jointly developed with India or any other country? 
  • Why cannot the Government form a joint venture with Sri Lankan companies? Why form it with Indians?
  • Did it cost an unaffordable amount to develop the Trinco Oil Tank Farm?
  • Do we intend on buying and selling oil, or look for offering the tanks for storage only? 
  • What is the LIOC doing with 99 tanks when there is no valid agreement with them to lease? 
  • Why cannot the Government totally cancel or remove the unwritten agreements to lease the tanks to the LIOC?
  • Why, at least, can it not remove the implication of the Trinco OilTank Farm from any such binding agreements even if they are unable to terminate the Indo-Lanka Accord?
  • Why cannot the Government cleanly secure for Sri Lanka, all 102 Tanks, pipelines, fuel jetty, and total infrastructure, out of any of the parties claiming to have a hold on it?
Thereafter, on a totally new, independent agreement, to invite investors to store large volumes of oil on a tonne per day rate (including the LIOC if required) only under the control of Sri Lanka. We Sri Lankans cry and plead not to allow politicians to sell this national asset even if it perishes in our soil! If they do not stop it, we the people have to use our will to stop it. (The writer is a retired ship captain) ……………………………………… The views and opinions expressed in this column are those of the author, and do not necessarily reflect those of this publication.  

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