Equity sharing arrangement with LIOC for development of Trinco oil tank farms

• Majority stake for CPC  
• Further talks are in progress

By Kelum Bandara

Energy Minister Udaya Gammanpila said yesterday the Trincomalee Oil tank farm would be managed under a company to be formed with Lanka Indian Oil Company with a majority stake for the Ceylon Petroleum Corporation (CPC).

In other words, it will be a company with majority stake for the CPC. It is subject to scrutiny by the Auditor General.  The Committee on Public Enterprises (COPE) can peruse the audit reports

Minister Gammanpila told a news conference that the agreement for such an equity sharing arrangement could be reached after successful negotiations with India.

 “In other words, it will be a company with majority stake for the CPC. It is subject to scrutiny by the Auditor General.  The Committee on Public Enterprises (COPE) can peruse the audit reports,” he said.  He said there are 99 tanks used during World War II with a capacity to store 10,000 tonnes of fuel in each.

“It means we can store fuel sufficient for two months,” he said.

 After the World War II, he said these tanks had not been utilised properly. He said the government of  former Prime Minister the late Sirimavo Bandaranaike acquired these tanks from the British rule, but the UNP government leased them out to LIOC for 35 years at an annual payment of US $ 1000 per tank.  “Now, 18 years of the lease period have lapsed. LIOC uses only 15 tanks,” he said.

 He further said talks are in progress with India on the timeline for the management of the tank farm, and the number of tanks to be kept under the sole purview of the CPC.

The Minister said the Cabinet paper would be submitted only after a broad consultation process with the trade unions and other stakeholders.