August, 2021 [SundayTimes] – A US company has expressed interest in developing a Trincomalee Harbour site and its precincts by setting up a mega oil refinery at an investment of US$ 3 billion, an Energy Ministry’s special memorandum has revealed.
The company, whose name is not revealed in the cabinet memorandum, has submitted an unsolicited proposal to develop the site near the port along with land area, 10 times greater than the Colombo Harbour,
According to the document, the Sri Lanka Port Development Authority’s National Port Development Plan has identified Tricomalee Port as a strategic harbour to cater for bulk cargo, and port related activities including heavy industries, tourism and agriculture.
Under this plan an oil refinery project will be implemented on a long term Build, Operate and Transfer Basis (BOT).
According to the Ministry memorandum, the oil refinery and an investment promotion zone with industrial park will be established in a 33000 acre land near this port.
The next stage of development will involve a call for proposals from potential investors for the Free trade Zone Industrial Park and Tourism Zone.
Sri Lanka is to liberalise the fuel refining, selling and distributing petroleum products in Sri Lanka by amending the Ceylon Petroleum Corporation (CPC) Act No 28 of 1961 by revising it for the second time after 2002, the Ministry of Energy has said in the memorandum. This amendment will allow the US investor to enter into the oil refining business with the investment of US$ 3 billion in the new project taking over the monopoly enjoyed by the CPC.
According to the present Act, the CPC has the sole authority in maintaining an oil refinery and this will end with the new amendment, a senior official of the Energy Ministry said adding that it will pave the way for other players to carry out the fuel importation and distribution as well.
Dr. Wasantha Bandara of the National Organisations Collective said India will not give up its interest in this strategic port as the Lanka Indian Oil Corporation has the control of profitable bunkering business in the Trincomalee Port and oil tank farm in the area.
He noted that the US project could serve as a counter to China’s influence in the Indian Ocean region, which includes the Hambantota port project, outside Colombo, and the under-construction Gwadar port in Pakistan.
Meanwhile a Mumbai-based company has been interacting with Sri Lankan authorities and officials in New Delhi since 2017 for a strategic collaboration between the two nations for the construction of a multipurpose harbour-cum-industrial zone at Trincomalee.
The estimated investment was $1 billion for the first phase of development primarily covering two container berths with a designed capacity of 1.4 million TEU per year, official sources said.
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