On 6th December 2022, Sri Lanka signed an agreement with India to jointly redevelop the strategic World War II-era Trincomalee Oil Tank Complex, commonly known as the Trinco Oil Tank Farm in Srilanka’s eastern port district of Trincomalee for a lease period of 50 years.
- The 85 tanks out of the 99 tanks will now be under the Sri Lankan control which was previously under the control of India.
The Cabinet approved the proposal to allocate 24 oil tanks to Ceylon Petroleum Corporation (CPC) and 14 oil tanks to the local operators of the Indian Oil Company (LIOC) while the remaining 61 oil tanks (out of the total number of 99 tanks) are to be developed under Trinco Petroleum Terminal Pvt. Ltd, with shares of CPC (51 percent) & LIOC (49 percent).
About Trincomalee Oil Tank Complex:
i.The facility, built by the British during World War II as a refueling station with 99 storage tanks that has the capacity of 12,000 kilolitres each.
ii.It has the oil storage capacity of nearly 8 million barrels of oil.
Signatories – The Treasury Secretary for the Government of Sri Lanka, Land Commissioner General, Ceylon Petroleum Corporation, the local operators of the Indian Oil Company (LIOC) and the newly formed Trinco Petroleum Terminal Ltd.
i.The agreement on Oil tank farms was first mentioned in the India-Sri Lanka Accord of July 29, 1987, which was signed by then Prime Minister Rajiv Gandhi and Sri Lankan President J R Jayewarndene.
ii.In 2002 Sri Lanka entered the original deal with India on the strategic oil storage complex and was revived by Indian Oil Corporation (IOC).
- The current new redevelopment agreement will be an extension of the 2002 agreement with the LIOC.
iii.Since 2003, the Lanka IOC, the Sri Lankan subsidiary of India’s oil major IOC, has the leasing rights to 99 tanks for a period of 35 years at an annual payment of USD 1 Lakh.
iv.In March 2015, India and Sri Lanka agreed to set up a petroleum hub in Trincomalee as a joint task force.
v.In 2017, the Rajapaksa government in Sri Lanka signed a Memorandum of Understanding (MoU) with India for several projects, including an agreement on the redevelopment of the Trinco tank farm but was not implemented.
Note – In 2021 Sri Lanka declared a ‘food emergency’, as the food shortages were worsened by the Government’s ban on agrochemical imports.
Recent Related News:
The 8th Edition of India-Sri Lanka bilateral joint Military Exercise ‘Mitra Shakti – 2021’ has been conducted at Combat Training School Ampara, SriLanka to enhance interoperability and sharing best practices in counter-insurgency and counter-terrorism operations.
About Sri Lanka:
President – Gotabaya Rajapaksa
Capital – Colombo (Legislative capital), Sri Jayawardenepura Kotte (Executive & Judicial Capital)
Currency – Sri Lankan Rupee