National Bhikkhu Front General Secretary Ven. Wakamulle Uditha Thera yesterday (5) claimed that the newly formed “Trinco Petroleum Terminal (Pvt.) Ltd.”, a subsidiary jointly owned by Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Company (LIOC), is “illegal”, and said that he has written to the Department of the Registrar of Companies (DRC), requesting that it be nullified.
The subsidiary is to develop 61 tanks at the Trincomalee Oil Tank Farm in China Bay on a 50-year lease as part of the Trincomalee Oil Tank Development Complex Project.
“It has been confirmed that tanks at the Trincomalee Oil Tank Farm, owned by the CPC, are going to be sold off through the newly formed Trinco Petroleum Terminal (Pvt.) Ltd. This is illegal as per the CPC Act No. 28 of 1961 and under Article 12(1) of the Constitution. That is why I have written to the Companies Registrar, asking him to look into the legality of this and to nullify the company,” the monk told The Morning yesterday.
Trinco Petroleum Terminal (Pvt.) Ltd., as per Ven. Uditha Thera’s letter, which was seen by The Morning, was registered on 24 December 2021 and violates Sections 5(B) (Import, export, sale, supply, or distribution of petroleum of certain classes or descriptions vested in the CPC), 5(D) (Exclusive right to explore for petroleum vested in the CPC), and 5(E) (Power of the Board of Directors to authorise persons to sell, etc., petroleum of certain classes or descriptions) of the CPC Act.
The Morning’s attempts to contact Minister of Energy Udaya Gammanpila, Ministry of Energy Secretary K.D.R. Olga, and CPC Chairman Sumith Wijesinghe regarding this allegation proved futile.
Gammanpila said on Tuesday (4) that the Trincomalee Oil Tank Development Complex Project was approved by the Cabinet of Ministers on Monday (3) and that the agreement pertaining to this development will be signed with India within a week. Sources told The Morning that the agreement will either be signed today (6) or on the following Monday (9).
As per this week’s cabinet approval, 24 of the 99 tanks will be given to CPC, 14 tanks will be given to LIOC, and 61 tanks will be given to Trinco Petroleum Terminal (Pvt.) Ltd., the latter on a 50-year lease, with CPC having the majority stake in the subsidiary.
The Trincomalee Oil Tank Farm, built by the British as a refuelling station during World War II, is located on 850 acres of land and originally contained 101 tanks, each with the capacity to hold 12,100 metric tonnes of oil. Out of the original 101 tanks, two had been destroyed in a kamikaze attack during a Japanese air raid on Trincomalee on 9 April 1942 and when a Royal Ceylon Air Force plane crashed in the early 1960s.
The LIOC acquired a one-third stake in Ceylon Petroleum Storage Terminals Ltd., which operated the Trincomalee Oil Tank Farm in 2003. Subsequently, the LIOC entered into a memorandum of understanding (MoU) with CPC for a 35-year lease to operate 32 of the 99 oil tanks for an annual payment of $ 100,000. However, parties were unable to finalise this 35-year lease due to strong opposition by trade unions and political parties. During Minister of Finance Basil Rajapaksa’s visit to India last month, he had reportedly initiated a fresh round of talks with India and the LIOC, where India had offered support to Sri Lanka on four pillars including the early modernisation of the Trincomalee Oil Tank Farm.
Due to Sri Lanka’s current foreign reserve crisis, the country has sought financial assistance from India in the form of a $ 400 million currency swap to help Sri Lanka address the existing balance of payment issues; a $ 1 billion line of credit to cover the import of food, medicines, and other essential items from India to Sri Lanka; and a $ 500 million line of credit to cover the importation of fuel from India.
