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Contradictions in Trinco oil tank deal

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By Neville Ladduwahetty

According to media reports the government of Sri Lanka (GOSL) has signed three new Agreements, dated 6 January, 2022 relating to the Trinco oil Tank Farms. The first with the Ceylon Petroleum Corporation (CPC), the second with the Lanka IOC PLC (LIOC), and the third with a Joint Venture Company incorporating the CPC holding 51% and LIOC holding 49% called Trinco Petroleum Terminal (Pvt.) Ltd. The three Agreements relate to the ninety-nine (99) Oil Tanks built during WWII on the basis of State leases, for a period of fifty (50) years. The first relates to twenty-four (24) tanks, the second to fourteen (14) tanks and the third to sixty-one (61) tanks.

As stated by the Minister of Energy Udaya Gammanpila, this current agreement is an outcome of the three previous agreements. In the course of an interview, he stated that the first was when “President J. R. Jayewardene agreed with India to develop and operate this tank farm jointly with India, so we have a bilateral obligation with India to develop jointly”. The second was when “Prime Minister Ranil Wickramasinghe, on 7 February 2003, leased out these tanks to India for 35 years. That is how they came into possession of these tanks. The third was when “Malik Samarawickrama – Sushma Swaraj MoU agreed with India to lease out the entire tank farm of 99 tanks to LIOC for a period of 99 years” (The Sunday Morning, January 16, 2022).

Minister Gammanpila has also said, “Sri Lanka was under obligation to India in respect of this tank farm through these three agreements. I had to negotiate with India in this backdrop. If I could ignore these agreements, I would have taken the entire tank farm into Sri Lanka’s possession; I would love to do that. Unfortunately, there are three agreements signed by previous governments and I am bound by them” (Ibid).

To claim that Sri Lanka is obligated by all three previous agreements is not only to assign equal status to all but also to accept the contradictions in the terms among the three agreements. For instance, the first agreement between Sri Lanka’s Head of State and the Prime Minister of India has no time bar while the second is by a Prime Minister of Sri Lanka to lease the tanks to India for a specified period of 35 years and the third, an agreement to lease all the tanks for 99 years, not to India but to a State entity of the government of India, LIOC. Furthermore, the first agreement was to develop the tanks jointly while the other two are on the basis of leasing them. Perhaps, India did not make an issue of violating the terms of the Indo-Sri Lanka Accord because the subsequent agreements are more favourable to it.

The specifics of the latter two agreement are not available to the public. Even if their contents are available to the Minister and he was aware of the circumstances that caused a lease for 35 years with the State of India to be extended for 99 years to an entity of that State as being of equal standing as the Indo-Sri Lanka Accord, this is not a tenable proposition. Furthermore, the Indo-Sri Lanka Accord is not limited to the oil tanks, whereas the other two agreements specifically relate only to the tanks. Therefore, as far as the tanks are concerned, there is every justification to address issues relating to them from a totally fresh perspective.

Minister Gammanpila claims this deal was a major achievement. The reason for such a claim is that until the agreements of January 6 2022 were signed, all 99 tanks had been leased either for 35 years or 99 years depending on which agreement one considers to be valid. Therefore, the agreement of January 6 2022 is a considered a gain because it regained 85 tanks that were in the possession of LIOC. Furthermore, the fact that 24 of the 85 would be exclusively operated by Sri Lanka and 61 jointly means a decided improvement. However, it must be clearly understood that the so called “gain” is only in respect of the tanks taken in isolation and not as part of a viable asset.

Could Sri Lanka have done even better and taken over all 99 tanks to be developed by Sri Lanka, while leaving the 14 tanks currently operated by LIOC for the remainder of the 35-year lease period as a measure of good faith? Since the provision of the Indo-Sri Lanka was for operating the entire Tank Farm jointly, and the agreements of 2003 and 2017 violated this provision, a claim could be made that sufficient grounds existed to take possession of all 99 tanks; a wish the Minister himself entertained during his interview.

REVISITING the AGREEMENT and its TERMS

How best to exploit the potential of these tanks has been the topic of much discussion and debate. However, the majority of these discussions have focused on these tanks as a legacy of World War II and how best to exploit its potential. It cannot be denied that taken in isolation, these tanks are nothing but 99 rusting steel tanks without much utilitarian value.

It is only in the context of its location that these tanks take on a whole new dimension and come alive as a vital economic asset because of its proximity to one of the best natural harbours in the world – the Trinco Harbour. Therefore, it is the Trinco Harbour that make these tanks a valuable asset.

These tanks were sited at this particular location because of the Trinco Harbour. Therefore, the tanks cannot be considered in isolation and independent of the Trinco Harbour. The tanks and harbour are inextricably linked and therefore it is absolutely vital that the tanks and the harbor are considered and treated as a single asset and not as separate assets. On such a basis, for the LIOC to hold 49% stake in the joint venture should be unacceptable because it amounts to the harbor being a give-away – a free gift to which a value cannot be assigned. Furthermore, the fact that the tanks amount to nothing but 99 steel containers without the harbour, strong grounds exist for Sri Lanka to revisit the deal and take possession of the tanks because the asset that transforms the tanks into an economically viable asset is the Trico Harbor, which is not associated with the deal.

Having taken possession of the tanks, Sri Lanka should perhaps restore a few tanks per year by seeking funds through local banks and pay back the loans by renting them to interested parties such as the LIOC and others who may find it profitable to store petroleum products when prices are low. Such an approach would be in keeping with the current government’s policy of self-reliance. Furthermore, the pace of restoration could be undertaken to keep in pace with the demand from interested parties.

CONCLUSION

The current agreement signed on 06 January 2022, which entitles Sri Lanka to operate 24 tanks exclusively and 61 tanks as a joint venture with India is decidedly an achievement over the agreements of 2003 and 2017, which leased these tanks for 35 and 99 years, respectively. However, the implication of these agreements is that both India and Sri Lanka have agreed that deviating from the basis of developing the tanks jointly as stated in the Indo-Sri Lanka Accord is acceptable.

All these agreements relate to the 99 tanks that by themselves amount to nothing but steel storage containers without much utility value. However, they have the potential to be transformed into a vital economic asset because of their proximity to one of the best natural harbours in the world – the Trinco Harbour. Therefore, any agreement relating to the tanks should take into account the fact that without the Trinco Harbour the tanks by themselves have little value. Consequently, the tanks and the Trinco harbour should be treated as a single asset and not as separate and unrelated assets. Under the circumstances, a share distribution of 51/49 favours India disproportionately because the asset that makes the enterprise a viable venture, namely the Trinco Harbour, belongs to Sri Lanka. It is this aspect that makes the 06 January2022 agreement unacceptable because the asset value of the Trinco Harbour has been totally disregarded.

Coupling such a context with the policy to deviate from the concept of jointly developing the tanks into one of leasing in the agreements of 2003 and 2017 gives Sri Lanka the opportunity to renegotiate and take possession of all 99 tanks, but permits LIOC to continue operating the 14 tanks until the current lease period lapses. Having renegotiated a fresh deal, Sri Lanka should restore a few tanks at a time with finances from local Banks, and pay back the loans by renting them to interested customers to store petroleum products.

Such a strategy would be in keeping with the spirit of self-reliance that has been with the Peoples of Sri Lanka and manifests itself occasionally, the most recent being the demand for Sri Lanka to construct the East Container Terminal that the Government intended to outsource. The spirit of self-reliance is not dead. Its resurgence awaits leadership. It is in such a spirit that the Trinco Tank Farm deal should be revisited.



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Features

Glimmers of hope?

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The newly appointed Cabinet Ministers leaves Cass un-uplifted. She need not elaborate. She wishes fervently that Dr Harsha de Silva will leave party loyalty aside and consider the country. Usually, it’s asking politicians to cast aside self-interest, which very rarely is done in the political culture that came to be after the 1970s. Thus, it is very unusual, completely out of the ordinary to appeal to Dr Harsha to forego party loyalty and do the very needful for the country by accepting the still vacant post of Minister of Finance. We are very sorry Eran W too has kept himself away.

Some of Cassandra’s readers may ask whether she is out of her right mind to see glimmers of hope for the country. She assures them she is as sane as can be; she does cling onto these straws like the dying man does. How else exist? How else get through these dire times?

What are the straws she clings to? News items in The Island of Tuesday 24 May.

‘Sirisena leaves Paget Road mansion in accordance with SC interim injunction.’ And who was instrumental in righting this wrong? The CPA and its Executive Director Dr Pakiasothy Saravanamuttu. It is hoped that revisions to the system will come in such as giving luxury housing and other extravagant perks to ex-presidents and their widows. Sri Lanka has always lived far beyond its means in the golden handshakes to its ex- prezs and also perks given its MPs. At least luxury vehicles should not be given them. Pensions after five years in Parliament should be scrapped forthwith.

‘Letter of demand sent to IGP seeking legal action against DIG Nilantha Jayawardena.’ Here the mover is The Centre for Society and Religion and it is with regard to the Easter Sunday massacre which could have been prevented if DIG Jayawardena as Head of State Intelligence had taken necessary action once intelligence messages warned of attack on churches.

‘CIABOC to indict Johnston, Keheliya and Rohitha’. It is fervently hoped that this will not be another charge that blows away with the wind. They do not have their strongest supporter – Mahinda R to save them. We so fervently hope the two in power now will let things happened justly, according to the law of the land.

‘Foreign Secy Admiral Colombage replaced’. And by whom? A career diplomat who has every right and qualification for the post; namely Aruni Wijewardane. If this indicates a fading of the prominence given to retired armed forces personnel in public life and administration, it is an excellent sign. Admiral Colombage had tendered his resignation, noted Wednesday’s newspaper.

‘Crisis caused by decades of misuse public resources, corruption, kleptocracy – TISL’.

Everyone knew this, even the despicable thieves and kleptocrats. The glaring question is why no concerted effort was made to stop the thieving from a country drawn to bankruptcy by politicians and admin officers. There are many answers to that question. It was groups, mostly of the middle class who came out first in candle lit vigils and then at the Gotagogama Village. The aragalaya has to go down in history as the savior of our nation from a curse worse than war. The civil war was won against many odds. But trying to defeat deceit power-hunger and thieving was near impossible. These protestors stuck their necks out and managed to rid from power most of the Rajapaksa family. That was achievement enough.

Heartfelt hope of the many

The newly appointed Cabinet Ministers leaves Cass un-uplifted. She need not elaborate. She wishes fervently that Dr Harsha de Silva will leave party loyalty aside and consider the country. Usually, it’s asking politicians to cast aside self interest, which very rarely is done in the political culture that came to be after the 1970s. Thus, it is very unusual, completely out of the ordinary to appeal to Dr Harsha to forego party loyalty and do the very needful for the country by accepting the still vacant post of Minister of Finance. We are very sorry Eran W too has kept himself away. As Shamindra Ferdinando writes in the newspaper mentioned, “Well informed sources said that Premier Wickremesinghe was still making efforts to win over some more Opposition members. Sources speculated that vital finance portfolio remained vacant as the government still believed (hoped Cass says) Dr Harsha de Silva could somehow be convinced to accept that portfolio.”

Still utterly hopeless

Gas is still unavailable for people like Cass who cannot stand in queues, first to get a token and then a cylinder. Will life never return to no queues for bare essentials? A woman friend was in a petrol queue for a solid twelve hours – from 4 am to 4 pm. This is just one of million people all over the country in queues. Even a common pressure pill was not available in 20 mg per.

Cassandra considers a hope. We saw hundreds of Sri Lankans all across the globe peacefully protesting for departure of thieves from the government. The ex-PM, Mahinda Rajapaksa’s answer to this was to unleash absolute terror on all of the island. It seems to be that with Johnson a younger MP stood commandingly.

Returning from that horror thought to the protesters overseas, Cass wondered if each of them contributed one hundred dollars to their mother country, it would go a long way to soften the blows we are battered with. Of course, the absolute imperative is that of the money, not a cent goes into personal pockets. The donors must be assured it goes to safety. Is that still not possible: assuring that donations are used for the purpose they are sent for: to alleviate the situation of Sri Lankans? I suppose the memory of tsunami funds going into the Helping Hambantota Fund is still fresh in memory. So much for our beloved country.

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Ban on agrochemicals and fertilisers: Post-scenario analysis

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By Prof. Rohan Rajapakse

(Emeritus Professor of Agriculture Biology UNIVERSITY OF RUHUNA and Former Executive Director Sri Lanka Council of Agriculture Research Policy)

There are two aspects of the ban on agrochemicals. The first is the ban on chemical fertilisers, and the second is the ban on the use of pesticides. Several eminent scientists, Dr Parakrama Waidyanatha (formerly the Soil Scientist of RRI), Prof OA Ileperuma (Former Professor of Chemistry University of Peradeniya), Prof C. S. Weeraratne (former Professor of Agronomy University of Ruhuna), Prof D. M. de Costa University of Peradeniya, Prof. Buddhi Marambe (Professor in Weed Science University of Peradeniya) have effectively dealt with the repercussion of the ban on chemical fertilisers which appeared in The Island newspaper on recently.

The major points summarised by these authors are listed below.

FERTILISER ISSUE

1. These scientists, including the author, are of the view that the President’s decision to totally shift to organic agriculture from conventional could lead to widespread hunger and starvation in future, which has become a reality. Organic farming is a small phenomenon in global agriculture, comprising a mere 1.5% of total farmlands, of which 66% are pasture.

2. Conventional farming (CF) is blamed for environmental pollution; however, in organic farming, heavy metal pollution and the release of carbon dioxide and methane, two greenhouse gases from farmyard manure, are serious pollution issues with organic farming that have been identified.

3. On the other hand, the greatest benefit of organic fertilisers as against chemical fertilisers is the improvement of soil’s physical, chemical and biological properties by the former, which is important for sustained crop productivity. The best option is to use appropriate combinations of organic and chemical fertilisers, which can also provide exacting nutrient demands of crops and still is the best option!

4. Sri Lanka has achieved self-sufficiency in rice due to the efforts of the Research Officers of the Department of Agriculture, and all these efforts will be in vain if we abruptly ban the import of fertiliser. These varieties are bred primarily on their fertiliser response. While compost has some positive effects such as improving soil texture and providing some micronutrients, it cannot be used as a substitute for fertiliser needed by high yielding varieties of rice. Applying organic fertilisers alone will not help replenish the nutrients absorbed by a crop. Organic fertilisers have relatively small amounts of the nutrients that plants need. For example, compost has only 2% nitrogen (N), whereas urea has 46% N. Banning the import of inorganic fertilisers will be disastrous, as not applying adequate amounts of nutrients will cause yields to drop, making it essential to increase food imports. Sri Lankan farmers at present are at the mercy of five organizations, namely the Central Department of Agriculture, the Provincial Ministry of Agriculture, the Private sector Pesticide Companies, the Non-Government organizations and the leading farmers who are advising them. Instead, improved agricultural extension services to promote alternative non-chemical methods of pest control and especially the use of Integrated Pest Management.

Locally, pest control depends mostly on the use of synthetic pesticides; ready to use products that can be easily procured from local vendors are applied when and where required Abuse and misapplication of pesticides is a common phenomenon in Sri Lanka. Even though many farmers are aware of the detrimental aspects of pesticides they often use them due to economic gains

We will look at the post scenario of
what has happened

1. The importation of Chemical fertilisers and Pesticides was banned at the beginning of Maha season 1 on the advice of several organic manure (OM) promoters by the Ministry of agriculture.

2. The Ministry of Agriculture encouraged the farmers to use organic manure, and an island-wide programme of producing Organic manure were initiated. IT took some time for the government to realize that Sri Lanka does not have the capacity to produce such a massive amount of OM, running into 10 tons per hectare for 500000 hectares ear marked in ma ha season.

3. Hence the government approved the importation of OM from abroad, and a Company in China was given an initial contract to produce OM produced from Seaweed. However, the scientists from University of Peradeniya detected harmful microorganisms in this initial consignment, and the ship was forced to leave Sri Lankan waters at a cost of US dollar 6.7 million without unloading its poisonous cargo. No substitute fertiliser consignment was available.

4. A committee in the Ministry hastily recommended to import NANO RAJA an artificial compound from India to increase the yield by spraying on to leaves. Sri Lanka lost Rs 863 million as farmers threw all these Nano Raja bottles and can as it attracts dogs and wild boar.

Since there is no other option the Ministry promised to pay Rs 50000 per hectare for all the farmers who lost their livelihood. It is not known how much the country lost due to this illogical decision of banning fertilisers and pesticides.

Recommendations

1. Judicious use of pesticides is recommended.

2. The promotion and the use of integrated pest management techniques whenever possible

3. To minimize the usage of pesticides:

Pesticide traders would be permitted to sell pesticides only through specially trained Technical Assistants.

Issuing pesticides to the farmers for which they have to produce some kind of a written recommendation by a local authority.

Introduction of new mechanism to dispose or recycle empty pesticide and weedicide bottles in collaboration with the Environment Ministry.

Laboratory-testing of imported pesticides by the Registrar of Pesticides at the entry-point to ensure that banned chemicals were not brought into the country.

Implementation of trained core of people who can apply pesticides.

Education campaigns to train farmers, retailers, distributors, and public with the adverse effects of pesticides.

Maximum Residue Level (MRL) to reduce the consumer’s risk of exposure to unsafe levels.

Integrated pest Management and organic agriculture to be promoted.

1. To ensure the proper usage of agrochemicals by farmers

All those who advised the Minister of Agriculture and the President to shift to OM still wield authority in national food production effort. The genuine scientists who predicted the outcome are still harassed sacked from positions they held in MA and were labelled as private sector goons. The danger lies if the farmers decide not to cultivate in this Maha season due to non-availability of fertilisers and pesticides the result will be an imminent famine.

The country also should have a professional body like the Planning Commission of

India, with high calibre professionals in the Universities and the Departments and

There should be institutions and experts to advise the government on national policy matters.

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Thomians triumph in Sydney 

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Nothing is happening for us, at this end, other than queues, queues, and more queues! There’s very little to shout about were the sports and entertainment scenes are concerned. However, Down Under, the going seems good.

Sri Lankans, especially in Melbourne, Australia, have quite a lot of happenings to check out, and they all seem to be having a jolly good time!

Trevine Rodrigo,

who puts pen to paper to keep Sri Lankans informed of the events in Melbourne, was in Sydney, to taken in the scene at the Sri Lanka Schools Sevens Touch Rugby competition. And, this is Trevine’s report:

The weather Gods and S.Thomas aligned, in Sydney, to provide the unexpected at the Sri Lanka Schools Sevens Touch Rugby competition, graced by an appreciative crowd.

Inclement weather was forecast for the day, and a well drilled Dharmaraja College was expected to go back-to-back at this now emerging competition in Sydney’s Sri Lanka expatriate sporting calendar.

But the unforeseen was delivered, with sunny conditions throughout, and the Thomians provided the upset of the competition when they stunned the favourites, Dharmaraja, in the final, to grab the Peninsula Motor Group Trophy.

Still in its infancy, the Sevens Touch Competition, drawn on the lines of Rugby League rules, found new flair and more enthusiasm among its growing number of fans, through the injection of players from around Australia, opposed to the initial tournament which was restricted to mainly Sydneysiders.

A carnival like atmosphere prevailed throughout the day’s competition.

Ten teams pitted themselves in a round robin system, in two groups, and the top four sides then progressed to the semi-finals, on a knock out basis, to find the winner.

A food stall gave fans the opportunity to keep themselves fed and hydrated while the teams provided the thrills of a highly competitive and skilled tournament.

The rugby dished out was fiercely contested, with teams such as Trinity, Royal and St. Peter’s very much in the fray but failing to qualify after narrow losses on a day of unpredictability.

Issipathana and Wesley were the other semi-finalists with the Pathanians grabbing third place in the play-off before the final.

The final was a tense encounter between last year’s finalists Dharmaraja College and S.Thomas. Form suggested that the Rajans were on track for successive wins in as many attempts.  But the Thomians had other ideas.

The fluent Rajans, with deft handling skills and evasive running, looked the goods, but found the Thomian defence impregnable.  Things were tied until the final minutes when the Thomians sealed the result with an intercept try and hung on to claim the unthinkable.

It was perhaps the price for complacency on the Rajans part that cost them the game and a lesson that it is never over until the final whistle.

Peninsula Motor Group, headed by successful businessman Dilip Kumar, was the main sponsor of the event, providing playing gear to all the teams, and prize money to the winners and runners-up.

The plan for the future is to make this event more attractive and better structured, according to the organisers, headed by Deeptha Perera, whose vision was behind the success of this episode.

In a bid to increase interest, an over 40’s tournament, preceded the main event, and it was as interesting as the younger version.

Ceylon Touch Rugby, a mixed team from Melbourne, won the over 40 competition, beating Royal College in the final.

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