Trinco tank farm: Towering stupidity

Tuesday 28th July, 2020

Power and Energy Minister Mahinda Amaraweera has recently made an unsuccessful attempt to reclaim 25 out of 99 Trincomalee oil storage tanks leased out to the Indian Oil Company (IOC), in 2003, for USD 100,000 per annum, for 35 years. There are 140 tanks on the farm, and many of them are in a state of disrepair. Having leased out the tanks, the then UNP government boasted the storage facility would be developed, but only 15 out of 99 tanks given to IOC are currently operational, we are told. Why couldn’t that administration repair those 15 tanks and increase the storage capacity of the Ceylon Petroleum Corporation (CPC)?

Minister Amaraweera has told the media that the CPC is planning to buy and store oil when the prices of crude plummet in the international market. This is something the CPC and governments should have done a long time ago.

The lame excuse that successive governments have trotted out for their failure to repair the Trinco oil tank farm is lack of funds. The cost of repairing the 25 tanks the government has requested India to return is said to be about Rs. 2,000 million. If the colossal waste of public funds under successive governments had been curtailed, the country would have been able to construct a brand new oil tank farm elsewhere besides repairing the existing one in Trincomlaee.

In April this year, oil prices turned negative for the first time in history with the producers paying buyers to remove the commodity owing to fears that they would run out of storage facilities. That situation arose because the demand for oil dropped as never before due to lockdowns and the attendant global economic slowdown. Sri Lanka did not benefit from that windfall. If it had maintained the Trinco oil tank farm instead of leasing it out, the CPC would have been able to make huge profits by purchasing and storing cheap oil, and even turn itself around while helping the country’s economy recover fast.

It is hoped that the next government to be elected will learn from the disastrous Trinco oil tank farm deal and refrain from committing the country irrevocably to such agreements in the future. It must not make the mistake of signing the US government’s Millennium Challenge Corporation (MCC) compact. If foreign powers are allowed to acquire land here, on lease or otherwise, they will never leave, and this country will become a playground for them. It is not possible that India, having gained a foothold in Trincomalee, through IOC, will go away, leaving the tank farm, when the lease expires. The same is true of China, which has got a port and thousands of acres of land around it, in Hambantota.

Having received no favourable response from the Indian government to his request, Minister Amaraweera is reportedly planning to have 25 oil storage tanks built in Hambantota. There are already several white elephants in that part of the country—an idling international airport, an empty international cricket stadium and a deserted international conference hall. The government ought to consider the economic feasibility of the proposed oil tank farm to be constructed in Hambantota. We can only hope that it will not end up being another political project in the tank.

We are not short of vociferous patriots among our political leaders. They condemn the former colonial powers at every turn and wax eloquent, on the Independence Day, boasting of their achievements and promising to develop the country. They should be ashamed of their failure to have maintained the Trincomalee oil tanks, built by the British.

On seeing what is going on, here, the British must be feeling relieved that they left this country, 72 years ago, and thinking that it is they who gained Independence in 1948.