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Petroleum Ministry to reacquire 99 oil tanks in Trincomalee
Saturday, 9 June 2012 - 10:44 AM SL Time
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The Petroleum Ministry is to reacquire the 99 oil tanks in Trincomalee which were leased out to Lanka Indian Oil Company (LIOC), highly placed sources of the Ministry told Ceylon Today.
The Ministry has already sought legal advice to nullify the agreement between the Petroleum Ministry and the LIOC signed in 2002 which authorized the leasing out of the oil tanks. The Ministry handed over 99 oil tanks to the LIOC under a 33-year lease.
The oil tanks are located in a land which belongs to the Trincomalee Government Agent s office and the Petroleum Ministry cannot sign lease agreements over oil tanks which are not located in a land that does not come under the purview of the Ministry, a senior official of the ministry told Ceylon Today.
He said the agreement over the Trincomalee oil tanks were signed during the tenure of the UNP Government.
Therefore, we are exploring the possibility of nullifying the agreement and reacquiring the oil tank, the official said. He added the ministry is considering the possibility of reacquiring the tanks after paying a reasonable compensation to the LIOC.
The ministry is of the view that the leasing out of the oil tanks in 2002 has not been done in a prudent manner, he asserted.
However, when contacted Managing Director / CEO of the LIOC Subodh Dikwale said the LIOC is unaware of any nullification of the agreement. He said the company is totally unaware of any new development.
We have not been informed of any new development and we do not expect such a move, he said. We have already allocated a large amount of money to refurbish the oil tanks, he added.
It is learnt that the LIOC has spent nearly USD 12 million in refurbishing and upgrading the facilities in the Lower Tank Farm, setting up a lubricant blending plant, upgrading the oil jetty, laying new pipelines and a bowser filling bay and developing infrastructure
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