Govt. in talks to take back Trinco oil tanks unused by LIOC

• Nearly 18 years after tanks were leased to LIOC, only 15 of 99 tanks being used
• Govt. in talks with LIOC and Indian Govt. to reclaim these tanks
• Says details of final agreement will be tabled in Parliament once agreement reached
• Special Audit Report on Storage and Distribution of Petroleum in SL recommends Oil Tank Farm be renovated, used to address issues in energy sector
• AG’s report presented to House by Speaker

By Chandani Kirinde

The Government has initiated discussions to take back a majority of the Trincomalee oil tanks which were given to the Lanka Indian Oil Corporation (LIOC) on a 35-year lease, Energy Minister Udaya Gammanpila told Parliament on Tuesday.

Responding to a question raised by Ratnapura District SJB MP Hesha Withanage, the Minister said that the Government had commenced talks with the LIOC and Indian Government to acquire some tanks which remained unutilised by LIOC, 18 years after they were acquired for its use.

“The UNP Government in 2003 leased all 99 oil tanks to LIOC for 35 years, a company in which India has 75% shares and Sri Lanka 25% shares. Eighteen years later, LIOC uses only 15 of the tanks. We hope to get back the unused tanks for our needs,” Gammanpila said.

He said once an agreement was reached, all the details would be tabled in Parliament. “I do not want to disclose the status of the ongoing talks given the delicate nature of amending a bilateral agreement which would be jeopardised if made public before a final decision is reached,” he said.

Gammanpila said he was hopeful that the unused tanks could be revived.

Gammanpila also said that the oil tank farm at China Bay had been acquired by Sri Lanka during S.W.R.D Bandaranaike’s rule in the late 1950s from Great Britain at a sum of 250,000 sterling pounds and added that of the 101 tanks only 99 were usable.

Meanwhile Speaker Mahinda Yapa Abeywardena yesterday presented to the House the Special Audit Report on the Storage and Distribution of Petroleum in Sri Lanka by the Auditor General (AG), in which he has recommended that the Trincomalee oil tank farm be renovated and used to address a number of issues in the energy sector, including storage in the case of fuel shortage facilities and risks and costs associated with land transportation of fuel.

The audit report said at present there exists in the country a high risk of fuel shortage due to the lack of storage facilities and the storage capacity should be increased so that the fuel requirement of the country could be stored for several months.

At present, the entire capacity of fuel storage in the country is adequate for diesel requirement for 27 days, petrol for 24 days, kerosene for 29 days and aviation fuel for 40 days.

The Audit Report said that adequate fuel storage facilities in the country should be maintained to do away with economic and other disadvantages resulting from the unnecessary emergency purchases.