Deal for new SL oil refinery will take at least a year to finalize-investor

29 March 2019 12:04 pm - 8     - {{hitsCtrl.values.hits}}

A A A

An agreement to build a proposed $3.85 billion oil refinery in Sri Lanka will take at least a year to be finalised as its main investor, India's Accord Group, says it is yet to recruit partners and conduct an assessment of the plan's viability. 

The comments add to confusion about the project, which was announced last week by the Sri Lankan Government as the nation's largest single foreign direct investment ever, but has since been the subject of conflicting statements by various parties.  Accord's Chairman S Jagatrakshakan, a former Indian government minister, said he has submitted a preliminary proposal to the Sri Lankan Government to invest in the project but has not finalised any terms of the deal. 

“The project assessment and financial viability assessment will take at least a year. We have not sorted out any of the equity partners for the projects, but are in talks with investors from many countries,” he told Reuters over the phone from the southern Indian state of Tamil Nadu.  The 68-year old politician is campaigning in Tamil Nadu for a seat in the current general election.

He was an MP and minister in the last Congress-led government in 2009-2014.  When the Sri Lankan Government made the announcement on March 19, it said the oil refinery would be a joint venture between Oman's oil ministry and Accord and cost $3.85 billion.  A day later, Omani officials denied involvement in the project, but the Middle Eastern country's oil minister arrived in Sri Lanka three days later and said he was “excited” to inaugurate the project though there was no indication of a firm deal in place. 

India and China have been vying for political influence in Sri Lanka in recent years, with investment a key part of the battleground.  The refinery's proposed site is 585 acres of land near the site of the new Humbantota International Port and a related industrial zone - both run by Chinese entities - on Sri Lanka's southern coast.   A Sri Lankan Government document seen by Reuters showed the previously proposed deal would have a debt to equity ratio of 51:49, and said the Accord Group's Singapore entity, Silver Park International Pte Ltd, would fund 70 percent of the equity, with Oman funding the rest. 

However, Jagatrakshakan said he expected 70 percent of the project to be bankrolled by debt from financial institutions, adding that Silver Park would get more investors to fund the equity stake.  “We are looking at getting 20-30 investors on board for the 30 percent equity investment in the project. We expect 70 percent of the project to be bankrolled by debt from financial institutions,” he said. 

A senior official at Sri Lanka's Strategic Development and International Trade Ministry, speaking on the condition of anonymity, said he was confident of the terms of the deal as originally announced by the government.  He said Jagatrakshakan's son Sandeep was also present when the deal was signed. Sandeep Jagatrakshakan did not respond to repeated calls seeking comment.  China is the biggest buyer of Omani oil, importing about 80 percent of the Middle Eastern nation's overall crude exports in January, according to Oman government data. (Reuters)

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

  Comments - 8

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 
  • Unchikun Friday, 29 March 2019 12:21 PM

    Another fake project? No one will be interested to invest in a country which is strapped with a massive debt burden.

    Asoka deSoyza Friday, 29 March 2019 12:31 PM

    But I thought Prime Minister Ranil Wickremesinghe started construction last Sunday when with much fanfare he laid the first stone?

    Missaka Friday, 29 March 2019 12:35 PM

    Haa,, haaa, why these men hoodwinking masses!. Do they think that all Sri Lankans are morons, may be few in the Diyawanna!

    Modaya Friday, 29 March 2019 01:39 PM

    The grand show what we saw is nothing more than another Volkswagen factory by this government....

    indika Friday, 29 March 2019 02:12 PM

    Then why on earth government has laid the foundation stone ???

    abc Friday, 29 March 2019 05:09 PM

    Some gleeful comments from MR lackeys hoping that the project would fail. Traitors!

    George Harry Friday, 29 March 2019 07:13 PM

    Kick-out India and go for good deal with China whose assistance sought by India itself to develop their own Country. It is clear, India is one of the BEGGAR COUNTRIES in the World.

    Jaliya Friday, 29 March 2019 08:37 PM

    Oh... just wait a minute, the deal is still very much on the table ... Just ask the infamous Omani Oil Minister. He has instructed the Aladdin to transport all concerned quickly back to sri lanka on his flying magic carpet.


Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




“Workers who fainted had water sprinkled on their faces and had to work again”

Health authorities believe the first reported Covid-19 infected worker from t

“Social media ruined us” - husband of Minuwangoda Brandix factory worker

The Minuwangoda Brandix factory worker who first tested positive for Covid-19

Last rites far from home

The body of the Sri Lankan migrant worker Bandu who died of coronavirus in Du

Doctors blame newborn for gash on her face

A baby born on September 21 at the Wathupitiwala Base Hospital in Gampaha has

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.