There was a recent news story that the Government is looking for investors to develop some of the oil tanks in the Trincomalee Oil Tank Farm on a long-term basis. When I saw the news, I was reminded of the Serivānija Jātaka.
The story is about a grandmother and granddaughter from a once-wealthy family who had fallen into poverty. Among the old pots and pans in their house was a bowl covered in dirt. They did not know that underneath all that dirt, the bowl was made of gold.
One travelling merchant realised its true value but tried to cheat them by claiming it was worthless. Later, another merchant came along, recognised that it was gold, and dealt with them fairly.
In some ways, the story of the Trincomalee Oil Tank Farm is similar. We have spent decades sitting on something enormously valuable without fully understanding what makes it valuable.
A national asset left to deteriorate
The Trincomalee complex originally had 101 tanks. Today, 99 remain. Construction began under the British in the 1920s and continued into the 1930s. Each tank was designed to hold roughly 12,000 MT of petroleum products, giving the entire complex a theoretical storage capacity of close to 1.2 million MT.
Of course, this does not mean we can fill all 99 tanks tomorrow. Many have remained unused for decades and require significant refurbishment, supporting pipelines, loading facilities, and other infrastructure before they can operate commercially.
That distinction is important. We sometimes speak about an asset as though its value comes simply from owning it. But in economics, an asset becomes truly valuable when it can be put to productive use.
A useful comparison is Muthurajawela. Sri Lanka developed the Muthurajawela Oil Tank Farm in the early 2000s, adding around 250,000 tonnes of petroleum storage capacity. The project was supported by a $ 72 million Export-Import (Exim) Bank of China loan. In other words, creating even a fraction of the storage capacity that already physically exists in Trincomalee required substantial new investment.
Yet for decades our main debate over Trincomalee was not about how to generate value from it. It was about who should be allowed to touch it.
Every time an investor or joint venture was discussed, slogans about ‘national assets’ appeared. Political protests followed. Different governments moved forward and backwards. Meanwhile, much of the infrastructure simply remained unused.
A national asset that is allowed to deteriorate is not becoming more national. It is simply becoming less valuable.
Why Trinco matters
The present arrangement is clearer than what existed before. Of the 99 tanks, 24 have been allocated to the Ceylon Petroleum Corporation (CPC), while Lanka IOC (LIOC) has 14 tanks. The remaining 61 are under Trinco Petroleum Terminal Ltd. (TPTL), a joint venture in which the CPC holds 51% and LIOC holds 49%.
The latest proposal is to bring investors into the development of 29 of those 61 tanks on a long-term basis. It has taken us almost a century from the construction of these tanks to reach this point. Better late than never.
But we should also understand why Trincomalee matters. This is not merely about storing Sri Lanka’s diesel and petrol. If that is the only objective, we are thinking too small.
Sri Lanka sits along one of the world’s important maritime routes. Trincomalee has a natural harbour and significant petroleum storage infrastructure already in place. Properly developed, the area can support petroleum storage, bunkering, trading, and re-export while strengthening Sri Lanka’s own energy security.
That wider strategic potential is already recognised. In April 2025, Sri Lanka, India, and the United Arab Emirates signed a Memorandum of Understanding (MOU) to cooperate in developing Trincomalee as an energy hub, including the tank farm, bunker fuel operations, and the possibility of a refinery.
Converting ownership into value
The recent instability in the Middle East is another reminder that energy security does not mean having one government company controlling everything. We learnt that painfully during the economic crisis.
Before the crisis, Sri Lanka’s fuel market was heavily concentrated around the CPC, with LIOC operating as the other established retail player. When foreign exchange disappeared and the country struggled to import fuel, being Government-owned did not magically create energy security.
Eventually, Sri Lanka opened the market further.
The same principle applies to storage. Security comes from having sufficient capacity, diversified suppliers, reliable infrastructure, access to capital, and alternative supply routes. Competition and private investment can strengthen those things rather than weaken them.
Of course, Trincomalee is strategically sensitive. That means investors must be selected through transparent and competitive procurement. Agreements should protect Sri Lanka’s security interests, provide fair commercial returns, establish clear access arrangements, and prevent the creation of another monopoly.
But ‘strategic’ should not automatically mean ‘the State must operate everything’. There is an opportunity cost to leaving assets idle. Every year a tank is unused, Sri Lanka loses potential storage income, investment, jobs, bunkering opportunities, and economic activity while the physical asset continues to deteriorate.
The real debate, therefore, should not be whether these tanks belong to us. They do. The question is whether we are capable of converting ownership into value.
The grandmother and granddaughter in the Serivānija Jātaka were poor while a golden bowl was sitting among their ordinary pots and pans because they did not know what they owned.
Sri Lanka knows what it owns in Trincomalee. Our problem is that for far too long, we have behaved as though we do not.
(The writer is the Chief Executive Officer of Advocata Institute. He can be contacted via dhananath@advocata.org)
(The opinions expressed are the writer’s own views. They may not necessarily reflect the views of the Advocata Institute or anyone affiliated with the institute)