Colombo, Jan 4 (FN Agency) Sri Lanka will likely sign an agreement with India next week on sharing the oil tank farm in Trincomalee with Lanka IOC, a subsidiary of Indian Oil Corporation, following the cabinet’s nod, a Sri Lankan Minister has said. Energy Minister Udaya Gammanpila told reporters at the weekly cabinet press briefing on Tuesday that cabinet approval for the agreement was obtained on Monday night and a date for the signing will be decided soon. Gammanpila said that a majority of the 99 tanks in Trincomalee will be in Sri Lanka’s control, with 24 under the direct control of state-run Ceylon Petroleum Corporation (CPC), while the remaining 61 will be brought under a Trinco Petroleum Terminal Ltd, which will be a subsidiary of the CPC, Sri Lankan media reported.
The CPC will have a 51 percent controlling stake in Trinco Petroleum Terminal Ltd, with Lanka IOC owning the remaining 49 percent. Gammanpila said the chairman of the company, as well as four out of its seven board members will all be appointed by the CPC. The company will be subject to government scrutiny and can be questioned by parliament committees, he said. “It will be very much part of the state machinery,” he said. Gammanpila said that, as a result of the agreement, 75 of the 99 tanks will effectively come under government control for 34 years. The Trincomalee oil tank farm was built by the British during World War II as a refuelling station. It is located in ‘China Bay’ in close proximity to the internationally coveted deep water natural harbour of Trincomalee. With signing of the agreement, India is poised to extend emergency Lines of Credit and a currency swap request to economically battered Sri Lanka.