Ceylon Petroleum Corporation (CPC) and Lanka IOC (LIOC) will enter into a joint venture to develop and manage 85 oil storage tanks in Trincomalee apart from the 15 oil tanks that are already used by the LIOC.
Addressing a media briefing held at Ministry premises yesterday, Petroleum Resources Development Minister Arjuna Ranatunga said the project would be carried out according to an action plan of the government and within a stipulated timeframe.
Their conditions imposed for this joint venture were approved by the Cabinet recently. Accordingly, the land where the Oil Tank Farm is located in Trincomalee will belong to the government as per the agreement. LIOC will be allowed to continue using the 15 tanks subject to a timeframe to be agreed upon.
“A set of 16 storage tanks out of 85 tanks will be assigned to this proposed subsidiary for development, and later, these storage tanks will be released to CPC for exclusive use,” he added. “We have planned to use these 16 oil tanks for fuel bunkering operations which will help to earn foreign exchange to the country.
Theses tanks will also be used to distribute fuel to the North and East halting the current transport of fuel from Colombo to these two provinces.The CPC now spends highly to transport fuel from Colombo to these provinces.
In 2003, the China Bay Oil Tank farm was handed over to the IOC on a 35-year lease agreement. However, there was a discrepancy in the financial clause which has led to a court case later.
However, in addition to the 15 oil tanks given to the IOC, the reaming 85 oil tanks are decaying for many years due to the lack of usage.This problem was not even rectified during the previous regime. A union leader who was interdicted for nine proven charges is heading CPC workers for the protest against this. He was with former President Mahinda Rajapaksa but never acted to develop these decaying tanks.But when we try to develop them with the aim of earning foreign exchange, they shout unnecessarily,” he added.
But, I must clearly said that if anyone tries to stage the protest causing inconvenience to the people, stern action will be taken against them. He further said that certain persons who engaged in transporting fuel from Colombo to North and East may not be happy with this as they will suffer loss of income.
“A new agreement will be signed for this joint venture for the timeframe to be decided by the Cabinet and the private sector can also make their own investments to develop these oil tanks,” he further added.