The proposed business evaluation of the Sapugaskanda Oil Refinery is not a preliminary step towards a Public-Private Partnership (PPP), but a Build-Operate-Transfer (BOT) arrangement structured around project financing, according to Ceylon Petroleum Corporation (CPC) Managing Director Dr. Mayura Neththikumarage.
The clarification was issued in the context of a Request for Proposal (RFP) formally published by the Department Consultant Procurement Committee on behalf of the CPC under reference REF/CPCD/02/2026.
The procurement exercise seeks to appoint a specialist consultancy firm to undertake a comprehensive business valuation of the Sapugaskanda Refinery development and its associated operations.
According to the RFP, the selected consultant will assess both tangible and intangible components of the State asset base, including operational capacity and broader business value. Interested firms have been instructed to download the bidding documents from the official public tenders’ section of the CPC website.
A hybrid pre-proposal meeting has been scheduled for 25 May at 10 a.m., to be conducted both online and at the Sapugaskanda Refinery conference facility. Prospective bidders must complete registration by 22 May. The deadline for submission of proposals has been fixed for 2 p.m. on 15 June. Technical and financial proposals are required to be submitted as separate sealed hard-copy envelopes to the Procurement and Stores Manager in Colombo, while a soft copy of the technical proposal must also be submitted via email.
Explaining the rationale behind the initiative, Dr. Neththikumarage said the structure was designed to preserve State ownership while enabling external financing and technical participation for operational improvement. He added that the outcome of the valuation exercise would directly determine the financial recovery framework applicable to potential investors under the BOT model.
“It is not a PPP. It is a BOT project. In a BOT arrangement, the investor builds and operates the facility for a defined period, during which they recover their investment and earn returns through operations, after which it is transferred back to the CPC. The level of initial investment we can justify depends on the valuation of the asset, including both tangible and intangible components. We are not only transferring physical infrastructure, but also brand value and the business itself. Therefore, a comprehensive business valuation is essential, as it will determine the recovery structure for the investor,” Dr. Neththikumarage stated.
Reiterating that ownership of the refinery would remain with the State, he emphasised that the arrangement was not a restructuring of the CPC but a financing mechanism for project development. He further noted that local employees would continue to form the core operational workforce, with external partners engaged primarily for investment recovery and selected operational functions.
“This is project financing, not restructuring. The facility will remain owned by the CPC. However, certain operational functions will be assigned to the investor. Our staff will continue to perform their roles, while the investor will earn returns through operational participation until their investment is recovered,” he said.
Addressing questions on potential foreign participation and technology integration, Dr. Neththikumarage confirmed that Chinese entities were among those showing interest, while stressing that there would be no transfer of ownership of the business itself. He also highlighted that the refinery already operated on upgraded digital systems, which would support future expansion and efficiency improvements.
“There are Chinese parties in the broader participation pool. Whoever invests will bring in capital and technology, but ownership will not change. It is similar to a lease arrangement in principle, where investment is recovered through usage returns. The refinery already has advanced digital infrastructure. We have implemented SAP S/4HANA in the refining module, and we are also integrating systems such as Microsoft Copilot and embedded Microsoft 365 tools, including AI-enabled solutions,” he explained.
In a separate development, the CPC is also advancing expansion work at the Trincomalee Port fuel storage and logistics network. However, Dr. Neththikumarage clarified that this expansion project was structurally independent from the Sapugaskanda Refinery valuation exercise.