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Questions in Lankan Parliament over Trincomalee Oil Tank Farm leased to India

October 08, 2021 01:23 PM

Colombo, A day after Indian Foreign Secretary Harsh Vardhan Shringla concluded his visit to Colombo, the Sri Lankan Parliament today saw questions being raised by some members over the Trincomalee Oil Tanks Farm leased to India over 30 years ago.


Members from the Opposition wanted to know about the fate of the tanks, to which Sri Lanka's Minister of Energy Udaya Gammanpila asserted that these are not being handed over to India.

"There is no basis in the reports that the Government is going to hand over the Trincomalee Oil Tank Farm to India. It is a bugbear which is spreading these days.," he said.

"According to the letter between J.R. Jayewardene and Rajiv Gandhi corresponding to the Indo-Lanka agreement, Trincomalee Oil Tank Farm can only be developed by India," he said.

In February 2003, an agreement was signed between Indian Oil Corporation (IOC), Sri Lanka Treasury, and Ceylon Petroleum Corporation (CPC) to lease the China Bay oil tank farm in Trincomalee. The oil tanks built by the British prior to World War II were lying idle for 70 years. The deal valid for 35 years, is extendable for 99 years.

According to the lease agreement, IOC would pay an annual amount of $100,000, which IOC has been paying. Currently only 15 out of the 99 oil tanks are used by IOC, according to the Financial Times, Sri Lanka.


In 2017, an MOU was arrived at between the two governments, for operating 15 oil tanks by the Indian Oil Corporation (IOC) in the lower tank farm zone; and by a joint venture of Ceylon Petroleum Corporation and the Lanka IOC in the upper portion consisting of the remaining 84 oil tanks in the upper tank region.


The tanks have a capacity of 12,250 KL each.

Answering opposition charges over the oil tanks, Gammanpila told Parliament on Wednesday that he will table the official agreement between India and Sri Lanka on the Trincomalee oil tanks in Parliament.


A tense situation arose in Parliament when the Chief Opposition Whip, Lakshman Kiriella raised concerns about the statements made by the Energy Minister on the Trincomalee Oil Tank Farm.

During the debate, MP Lakshman Kiriella said that the 15 oil tanks have been given to India while the rest were reserved to be jointly developed by Indian Oil Corporation (IOC) and Sri Lanka.


Another MP Kabir Hashim alleged that Lanka IOC (LIOC) had kept the oil tanks illegally and that the Rajapaksa government could have reacquired the oil tanks between the 2005–2015 period, reported.

MP Hashim asked Minister Gammanpila whether the Government would reacquire the tanks now.


The issue of the Trincomalee Oil Tank Farm had also found mention in the talks between President Gotabaya Rajapaksa and Foreign Secretary Harsh Vardhan Shringla on Tuesday. According to a media release from the President’s Office, the President, in reference to the topic, “told Indian Foreign Secretary Harsh Vardhan Shringla that in order to resolve the situation surrounding the Trincomalee Oil Tank Farm, the Minister in charge of the subject has been entrusted with the task of resolving the situation in a manner that is beneficial to both countries”.


He told Indian Foreign Secretary Harsh Vardhan Shringla that the people in the two countries should be properly apprised regarding the decisions taken by the two sides in reaching an agreement.

He emphasized on the need to act with the consent of the majority of the people by explaining the advantages and disadvantages, the media division said.



In the Parliament on Wednesday, Minister Udaya Gammanpila said that the agreement in question is not a permanent one, but is a lease agreement and will be tabled in Parliament by him.


On Monday, the Minister told Parliament that Sri Lanka could develop the 100 oil tanks in the Trincomalee oil farm only as a joint venture with India as per the Indo-Lanka accord signed in 1987.

Even after a 35-year lease deal with the state-run Indian Oil Corporation (IOC) ends, Sri Lanka would still have to develop the tanks with India and India only, Minister Gammanpila said.


Responding to a question from the Opposition that Sri Lanka was going to sell all the oil tanks to India, the Minister said there was nothing left to be given.


“There is not even a modicum of truth about what is reported everywhere,” he said.


“There is no truth in the reports that the Indian Foreign Secretary met me or that I went with him in a helicopter. In fact, the Indian Foreign Secretary hasn’t even asked for an appointment.”


“Even after the current 35-year agreement ends, we cannot go with any other investor. We have to go only with India as per the 1987 Indo-Lanka accord,” the Minister said


“All tanks have been given to India under the 2003 agreement. I am only trying to get back some of the unused tanks for Sri Lanka’s use,” Minister Gammanpila said.

He said he as the subject minister was making every effort for the last one and half years to bring the oil tanks to government's purview.

In February this year, the Indian High Commission had issued a press statement stressing that the deal between the two countries on the 99 World War II-era Trincomalee oil tanks has not been scrapped.

“There is no truth in reports in some sections of the media that the understanding between India and Sri Lanka on jointly developing and operating the Upper Tank Farm at Trincomalee has been ‘scrapped’," it had said.

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