Sri Lankan Energy Minister, Udaya Gammanpila, has claimed to be finalising the Trincomalee project with India and has told the Hindu that he hopes “sign the agreement in a month”.
The agreement would see 99 storage tanks of oil kept in Trincomalee leased out to the Indian Oil Corporation (LIOC). Each tank has a capacity of 12,000 kilolitres and the LIOC currently runs 15 tanks.
The announcement follows meetings between Sri Lanka’s Finance Minister, Basil Rajapaksa, and the New Delhi administration in which India called to expand on several projects in the Tamil homeland whilst Sri Lanka desperately sought economic assistance.
Read more here: India cracks the whip in Sri Lanka?
Relations between Sri Lanka and India have been strained since Sri Lanka’s unilateral withdrawal from the East Container Terminal agreement with India and Japan, a deal worth an estimated $700 - $800 million dollars.
According to diplomatic sources New Delhi’s agreement on an emergency line of credit and currency swap is content on the Trincomalee deal going forwards. However, Gammanpila has rejected the idea insisting “there is no connection whatsoever” and claiming:
“Some including the political opposition are suggesting that India’s economic assistance is tied to the Trincomalee deal. I vehemently deny that. We began negotiating this agreement well before the economic assistance was sought”.
The Hindu highlights that whilst discussions on the project have been ongoing for the past 16 months; they can be traced back 35 years ago to the Indo-Lanka Accord. The annexure of the Accord’s states that ”the work of restoring and operating the Trincomalee oil tank farm will be undertaken as a joint venture between India and Sri Lanka”. However, there was little movement until 2003 when the Indian Oil Corporation set up Lanka IOC, its Sri Lankan subsidiary.
India has thus far remained silent on the aid it is offering to Sri Lanka.
Read more here.